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| *The Commerce Journal>>>Personal Finance |
Is it ok to buy stocks with a credit card? |
Is it ok to buy stocks with a credit card? It may be legal but it definitely isn't smart. If you don't have cash-in-hand to invest with, you shouldn't be buying stocks. Do you mean, "is it legal? " - Yes um, no, that sort of thing is what started the crash that lead to the great depression It's generally not a good idea to buy stocks on margin (credit) since it puts you at a huge risk. Also, most credit cards won't have a large enough balance to let you buy enough to earn money. You'll get nickled and dimed to death with commissions. yeah its ok if you have a creditcard with you to use, but its not ok if you don't have one. Absolutely NOT! It's not a very intelligent thing to do, if you think about it. Credit card interest is guaranteed, stock appreciation is not. It's not even possible to buy stocks with a credit card. A brokerage will require you to open a cash account before you can trade securities. I have frequently used money from zero percent promotional offers on credit cards to make investments. I consider it a good way to make an easy profit off of the below market interest rate on the credit card offer. However, I have always put the money into banks accounts or money market funds, or some similar low risk investment. If you put it into something as volatile as stocks or stock mutual funds, you are facing a very real risk of your investments going down in value and needing to pay off the credit card with your own money. It's legal but risky. You would be gambling with the money, not investing. |
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