At TPG, we primarily concentrate on maximizing spending and serving to readers familiarize themselves with several types 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 foreign money and the way bank card rewards might be pivotal in serving to you’re taking a dream journey.
There’s additionally a variety of area of interest content material we cowl, together with this query we generally get from readers: Can I purchase shares with a bank card?
In brief, the reply is sure — however we do not suggest doing so for a number of causes (certainly one of them being it is extremely tough to discover a dealer that accepts bank cards as fee for shares).
Let’s assessment why shopping for shares with a bank card is not the most effective 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 bear in mind the assorted dangers, charges and different elements that would reduce into your earnings. We’re not simply speaking about maximizing factors right here — there are monetary dangers to concentrate on (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 could find yourself paying money advance charges — which might prime %5, late fee charges in the event you overlook to pay your card on time and curiosity charges in case your stability is not paid off each month. Curiosity on money advances is far greater 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 effective print in your card’s charges and costs and the effective print on the platform you intend 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 price of residing, inflation and different unpredictable occasions like layoffs imply it is best to take warning and be well-informed concerning your funding choices earlier than making any choices — no matter whether or not they contain a bank card or not.
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Moreover, shopping for shares with a bank card might increase some pink flags together with your card issuer. Issuers could also be extra-vigilant relating to 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 potential unfavorable impression this might have in your credit score. Charging massive inventory purchases to your bank card can enhance your utilization charge, which may 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 could additional cut back the earnings (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 in the event you’re hit with a 29%-plus curiosity cost by your bank card issuer. In case you’re investing long-term, utilizing a bank card could also be a nasty concept if you do not have different funds put aside to repay the cardboard.
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The place you should purchase shares with a bank card?
Discovering a dealer, app or different associated platform to buy shares is tough. Most platforms — together with standard 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 permit customers to buy Stockpile present playing cards utilizing a bank card, however there are every day limits to how a lot you should buy, amongst different issues that make this a less-than-desirable possibility.
Associated Studying: The most effective funding apps
Which bank cards to make use of
In case you do resolve to make use of a bank card to purchase shares, you will need to use one which earns essentially the most rewards potential. 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 need to use a card that earns greater than 1 level per greenback spent or gives some type 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 may get a cash-back bank card after which use the sign-up bonus to fund a brokerage account and purchase shares via that account.
Constancy Rewards Visa Signature Credit score Card
The Constancy® Rewards Visa Signature® Credit score Card would 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 unbelievable flexibility because you’re in a position 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 might help you just do 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 a substitute of utilizing this card to purchase shares, you may 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 gives 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 in the event you’re in search of a long-term cash-back card to construct up your funding account, it is an possibility. The cardboard earns 1.5% money again on every part, and the funds are robotically 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 an even bigger welcome bonus and do not thoughts manually transferring money into your brokerage account each month, think about Chase Freedom Limitless. The cardboard presently 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 solution 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 gives 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 charge is best 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 would enterprise to guess that if in case you have balances this huge in your funding account, you are not fearful 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: Greatest bank cards for wonderful credit score
Banks that pay you to fund funding accounts
If incomes miles for purchasing shares nonetheless seems 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. This is an summary of among the finest present gives:
Charles Schwab: As much as $1,000
Charles Schwab is providing $100 once 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 once 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 need a respectable reward in alternate 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 internet price, depositing $5,000,000 will internet you a $10,000 money credit score in your brokerage account.
Backside line
It is potential to purchase shares with a bank card, however there are a variety 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 in the event you’re additionally utilizing a bank card, there are numerous ways in which you might land in a tricky spot financially.
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