At TPG, we primarily give attention to maximizing spending and serving to readers familiarize themselves with various kinds of bank cards to get outsize worth from those of their wallets. We additionally love discussing numerous redemption choices you may make with issuer-specific rewards forex and the way bank card rewards might be pivotal in serving to you’re taking a dream journey.
There’s additionally loads of area of interest content material we cowl, together with this query we typically get from readers: Can I purchase shares with a bank card?
In brief, the reply is sure — however we do not advocate doing so for a number of causes (one in every of them being it is extremely troublesome to discover a dealer that accepts bank cards as cost for shares).
Let’s assessment why shopping for shares with a bank card is not one of the best investing follow — plus, what different choices can be found.
Issues to know before you purchase shares with a bank card
Before you purchase shares with a bank card, it is essential to take into consideration the varied dangers, charges and different elements that would minimize into your income. We’re not simply speaking about maximizing factors right here — there are monetary dangers to pay attention to (as is the case with most investments).
Concentrate on funding charges
Shopping for shares with a bank card comes with a number of charges. You might find yourself paying money advance charges — which may prime %5, late cost charges for those who neglect to pay your card on time and curiosity charges in case your steadiness is not paid off each month. Curiosity on money advances is way increased than utilizing your bank card for normal transactions and begins accruing when the money advance is executed.
These charges can add up shortly, so be sure to learn the tremendous print in your card’s charges and costs and the tremendous print on the platform you propose to make use of to purchase shares.
It is dangerous
There are apparent dangers concerned in shopping for shares with a bank card. For starters, the inventory market might be risky. A downturn can simply wipe out the rewards you earn from shopping for shares with a bank card.
Plus, the rising value of dwelling, inflation and different unpredictable occasions like layoffs imply it is best to take warning and be well-informed relating to your funding choices earlier than making any selections — no matter whether or not they contain a bank card or not.
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Moreover, shopping for shares with a bank card could increase some crimson flags together with your card issuer. Issuers could also be extra-vigilant in terms of spending it deems “dangerous.” Inventory purchases definitely fall into that class. The very last thing you need is to get your bank card account shut down simply to earn some factors or miles.
There’s additionally the attainable damaging impression this might have in your credit score. Charging giant inventory purchases to your bank card can improve your utilization fee, which might negatively impression your credit score rating. And if you cannot repay your bank card each month, you will incur curiosity charges that would wipe out any monetary achieve, not to mention the worth of the factors you’ve got earned.
Concentrate on the tax implications
Along with the charges imposed by your bank card issuer, your inventory investments could also be topic to capital beneficial properties taxes. This may additional cut back the income (and rewards) you are incomes by paying with a bank card.
Associated: Are you able to pay taxes with a bank card?
Repay your card
No matter what purchases you are placing in your bank card, it is important that you just pay it off each month to keep away from excessive curiosity charges. Your short-term inventory beneficial properties imply nothing for those who’re hit with a 29%-plus curiosity cost by your bank card issuer. When you’re investing long-term, utilizing a bank card could also be a foul concept if you do not have different funds put aside to repay the cardboard.
Associated: Listed below are 3 dependable methods to repay bank card debt
The place you should buy shares with a bank card?
Discovering a dealer, app or different associated platform to buy shares is troublesome. Most platforms — together with fashionable ones like SoFi and Robinhood — require customers to hyperlink a checking account as a way to buy shares.
Stockpile — a brokerage app geared towards households — does enable customers to buy Stockpile present playing cards utilizing a bank card, however there are each day limits to how a lot you should purchase, amongst different issues that make this a less-than-desirable choice.
Associated Studying: The very best funding apps
Which bank cards to make use of
When you do resolve to make use of a bank card to purchase shares, you will wish to use one which earns probably the most rewards attainable. So far as we all know, Stockpile is not coded as a bonus class, so you will earn the bottom variety of factors issued by your bank card. That is why you will wish to use a card that earns greater than 1 level per greenback spent or affords some sort of annual spending reward.
Some good choices embrace the next:
| Card | Reward charges |
|---|---|
| Chase Freedom Limitless® |
|
| Capital One Enterprise Rewards Credit score Card |
|
| The Blue Enterprise® Plus Credit score Card from American Categorical |
|
| Citi Double Money® Card |
|
Fund your brokerage account with a bank card
With so many charges concerned, it is positively price exploring alternate options to purchasing shares with a bank card. For starters, you will get a cash-back bank card after which use the sign-up bonus to fund a brokerage account and purchase shares by that account.
Constancy Rewards Visa Signature Credit score Card
The Constancy® Rewards Visa Signature® Credit score Card does not have a welcome bonus, however the card does earn 2% money again on all spending, which will get deposited instantly into your Constancy brokerage account.
Money-back rewards present unimaginable flexibility because you’re ready to make use of them for journey or no matter you need, freed from blackout dates or restrictions. And if you wish to develop your funding portfolio, the Constancy Rewards Visa will help you do exactly that.
The knowledge for the Constancy Rewards Visa Signature card has been collected independently by The Factors Man. The cardboard particulars on this web page haven’t been reviewed or supplied by the cardboard issuer.
For a extra versatile various, think about the Citi Double Money. As an alternative of utilizing this card to purchase shares, you possibly can switch the cash-back rewards into your brokerage account (or convert them to Citi ThankYou rewards for high-value journey redemptions).
Schwab Investor Card from American Categorical
The Schwab Investor Card® from American Categorical affords a $200 assertion credit score after you spend $1,000 within the first three months of card membership.
That is not the largest bonus on the market, however for those who’re on the lookout for a long-term cash-back card to construct up your funding account, it is an choice. The cardboard earns 1.5% money again on the whole lot, and the funds are mechanically deposited into your Schwab funding account.
The knowledge for the Schwab Investor Card has been collected independently by The Factors Man. The cardboard particulars on this web page haven’t been reviewed or supplied by the cardboard issuer.
If you’d like a card with a much bigger welcome bonus and do not thoughts manually transferring money into your brokerage account each month, think about Chase Freedom Limitless. The cardboard at present has a welcome supply of $250 cash-back after spending $500 on purchases within the first three months from account opening. It isn’t an enormous amount of money, however a pleasant option to pad your funding account.
The Platinum Card from American Categorical Completely for Charles Schwab
The Platinum Card® from American Categorical Completely for Charles Schwab is exclusive in that it earns Membership Rewards factors that may be cashed out at a positive ratio into your Schwab funding account.
The cardboard affords a welcome bonus of 80,000 factors after $8,000 spent inside six months of account opening. This bonus might be redeemed for a $880 deposit into your eligible Schwab account.
In response to TPG’s March 2025 valuations, Membership Rewards factors are price 2 cents every making this welcome supply price $1,600. Although there are positively higher makes use of for these factors, this redemption fee is healthier than cashing out your factors for a press release credit score.
The cardboard has a $695 annual payment and earns 5 factors per greenback spent (as much as the primary $500,000 every calendar 12 months) on flights booked instantly with airways or Amex Journey.
One other perk distinctive to this card is that cardholders obtain assertion credit for qualifying balances of their funding accounts: $100 for holdings over $250,000 and $200 for balances over $1,000,000. I might enterprise to guess that in case you have balances this massive in your funding account, you are not nervous a couple of $100-$200 bonus, however it’s good to have nonetheless.
The knowledge for the Amex Platinum Completely for Charles Schwab has been collected independently by The Factors Man. The cardboard particulars on this web page haven’t been reviewed or supplied by the cardboard issuer.
Associated Studying: Finest bank cards for wonderful credit score
Banks that pay you to fund funding accounts
If incomes miles for purchasing shares nonetheless appears like a great worth proposition, take into account that you might be giving up money. A number of banks are providing substantial money bonuses for funding brokerage accounts. Here is an outline of among the greatest present affords:
Charles Schwab: As much as $1,000
Charles Schwab is providing $100 while you fund a Schwab One account beginning at $25,000. Bonuses go as excessive as $1000 for deposits of $500,000+:
- $100 for depositing $25,000-$49,999
- $300 for depositing $50,000-$99,999
- $500 for depositing $100,000-$499,999
- $1000 for depositing 500,000 or extra
Merrill Edge: As much as $600
Merrill Edge is providing as much as $600 while you deposit $200,000 or extra.
- $100 for depositing $20,000 to $49,999.99
- $150 for depositing $50,000 to $99,999.99
- $250 for depositing $100,000 to $199,999.99
- $600 for depositing $200,000+
E-trade: As much as $10,000
E-trade’s bonuses begin at $50 for $1,000. That is nice for low-level buyers who desire a first rate reward in change for funding a brokerage account:
- $50 for depositing $1,000-$4,999
- $150 for depositing $5,000-$19,999
- $300 for depositing $20,000-$99,999
- $600 for depositing $100,000-$199,999
- $800 for depositing $200,000-$499,999
- $1,000 for depositing $500,000+$999,999
For these with ultra-high web price, depositing $5,000,000 will web you a $10,000 money credit score in your brokerage account.
Backside line
It is attainable to purchase shares with a bank card, however there are loads of downsides to contemplate. Along with all of the charges concerned, it’s possible you’ll be giving up profitable bonuses you might earn by funding a brand new brokerage account with money. Investing in shares is dangerous as it’s, and for those who’re additionally utilizing a bank card, there are lots of ways in which you might land in a tricky spot financially.
Associated: Why factors and miles are a foul long-term funding
