Categories
Make Money From Home

Can You Buy Stocks With a Credit Card? – WTOP

You could tap your credit card to make an investment if you’re short on cash — but you probably shouldn’t.…

You could tap your credit card to make an in…….

You could tap your credit card to make an investment if you’re short on cash — but you probably shouldn’t.…

You could tap your credit card to make an investment if you’re short on cash — but you probably shouldn’t. While buying stocks with funds from a credit card loan or credit card cash advance is possible, it’s nearly impossible to realize a profit after fees, interest and taxes.

[Read: Best Cash Back Credit Cards.]

How Can Credit Cards Be Used to Buy Stocks?

You need cash to buy stocks, as investment brokers often require funding from a bank account. Some brokers, such as Stockpile, accept cash from debit cards.

You have two options to get cash from your credit card. Keep in mind that these moves come with interest and other drawbacks.

Credit card loans. With a credit card loan, you can borrow against your card’s credit limit and get a cash deposit in your account. You’ll repay the loan in installments at an agreed-upon interest rate, usually lower than your card’s annual percentage rate, but possibly higher than personal loan rates.

Cash advance. A cash advance allows you to get cash from your credit card using an ATM, bank withdrawal or a convenience check. Cash advances usually have fees, a higher APR than your card’s purchase APR and no grace period, so interest charges start accruing as soon as you take cash out.

Does Buying Stocks With a Credit Card Affect Your Credit Score?

Credit scoring systems don’t know what you’re charging on your credit cards, but they do know how much of your credit line you’re using and whether you pay your bill on time and in full. Your credit card balance and credit utilization go up whether you’ve gone on a shopping spree or taken out a cash advance or credit card loan for investments.

Using too much of your credit limit can hurt your credit score. “The higher your balance, the (closer) you are to your limit and the higher your utilization ratio will be,” says credit expert John Ulzheimer, who formerly worked for Equifax and FICO. “That’s not a good thing for scores.”

Planning a larger financial move, like buying a home or car? Having a significant balance for any reason can hurt your chances of getting approved for a loan. “If you’re planning to apply for a loan, you’ll want to have that balance paid way down, especially if it’s using up a lot of your credit line,” …….

Source: https://wtop.com/news/2021/10/can-you-buy-stocks-with-a-credit-card/

Leave a Reply

Your email address will not be published. Required fields are marked *