Key takeaways
- Buying stocks with a credit card is generally not allowed by reputable brokerage firms.
- Using credit cards to fund stock purchases can lead to high interest costs and open you up to potential fraud.
- There are alternatives for leveraging credit cards to invest, such as using investment apps or cash back rewards.
Every investor must balance risk and reward, but attempting to buy stocks with a credit card can quickly turn the odds against you. If you have disposable income, you may be considering putting those funds into the stock market to grow.
While the basics of investing are pretty simple to master, these steps go out the window if you try using credit cards to buy stocks. We’ll share why it’s a bad idea to buy stocks using credit cards.
Can you buy stocks with a credit card?
The truth is, most reputable brokerage firms won’t let you use a credit card to buy and sell stocks, according to Experian.
There are creative ways to indirectly use a credit card to buy stock, but the downsides of doing this can be tough to justify. For example, while you can take a cash advance and use this cash to purchase stocks, most credit cards charge high fees for doing so. You also typically won’t be eligible to earn points or rewards on stock purchases, making the transactions even less appealing.
So does it make sense to use a credit card to buy stocks in this ever-fluctuating market? Generally, no. Besides the downsides listed above, choosing to do so could put you at risk for fraud, hurt your credit score or end up costing you more in interest than you’ll earn in returns.
Most brokers won’t allow you to fund your account using a credit card, but even if you could, it’s a bad idea. The interest rate on most credit cards is well above the long-term returns available by investing in stocks, so you’re fighting an uphill battle from the start. In general, investing using borrowed money is a risky strategy that can lead to permanent losses.
— Brian Baker, CFA, Bankrate senior writer, Investing and Retirement
Risks of buying stocks with a credit card
Buying stocks comes with the inherent risk of losing your investment, because the market can be volatile. Even stock experts have lost their shirts in the market because something changed in the formulas they use to make their picks.
Stock prices are affected by short- and long-term factors — such as recessions, economic slowdowns, inflation and interest rates — that are always at play. It can be disappointing when your own money is lost, but the consequences of paying interest on borrowed funds, and running up your credit limit, can be even greater.
Paying more in interest than you get in returns
When you invest in stocks, you’re taking a calculated risk. If you’re unable to afford the amount you invest using credit cards, chances are you’ll rack up much more in high interest on your card balance than you stand to gain with your stock investment.
Further, if you use credit cards to buy stocks and the price drops, you could not only lose money on your investment, but it could cost you even more in interest if you don’t pay off the card’s balance by the due date.
“For example, if your credit card charges a 15 percent interest rate and your investment provides a 10 percent return, you’ll still owe more money than you made on your investment if you don’t pay off your credit card balance before any interest accrues,” according to the Securities and Exchange Commission (SEC).
As of May 2025, the average credit card APR is around 20 percent. Average stock market returns vary, but J.P. Morgan Wealth Management pegs them at around 10 percent — and that’s for long-term, less volatile investments.
Fraud risks
If you do find a brokerage that allows you to buy stocks with credit cards, be aware that you could be working with a disreputable agency that puts your funds at risk. You could also find yourself facing identity theft if your personal and financial information is shared with bad actors, as quite a lot of personal information is required to open a brokerage account.
Similarly, sellers who pressure you into using credit cards to buy stocks are likely involved in fraudulent scams. For example, take the case of SEC v. Senderov and Babazara, involving a fraudulent multi-million dollar scheme that used call centers to solicit investors in high-risk binary options, which were typically paid via credit card or bank wire to third-party companies. Without admitting or denying the allegations, the defendants agreed to pay $560,000 in disgorgement and prejudgment interest, and each agreed to pay a $350,000 civil penalty.
If you choose to go ahead and use your credit card to invest, keep an eye on your credit account for any questionable transactions. If you notice anything suspicious, report it to your card issuer immediately.
Safer ways to invest using a credit card
Buying stocks is risky business, but there are safer ways to use your credit card to earn returns in the market without directly buying stocks.
Use an investment app
Investment apps including Acorns are an easy way to use your credit card to begin building your investment portfolio.
Acorns allows you to link a credit card to what it calls its Round-Up® program. If you use your credit card to buy an item that costs $56.14, Acorns rounds that up to $57 and transfers 86 cents into your choice of an Acorns investment account, which is usually a mix of stocks and bonds.
There are similar investment apps that you can use with ease from your phone to grow your money securely.
Open a credit card that invests rewards
While many rewards cards earn cash back, points or miles you can use toward future purchases, some credit cards offer the option to deposit the cash back you earn into an investment account.
The Fidelity® Rewards Visa Signature® Credit Card* offers a competitive 2 percent cash back on all purchases. That cash back is automatically deposited into a qualifying Fidelity retirement, IRA or brokerage account. This card is a favorite of John Puterbaugh, a senior editorial director at Bankrate, who chooses to automatically transfer cash back into his IRA.
Invest your cash back rewards
If you already have a cash back rewards card, you can request your cash back in the form of a check or a deposit. Your issuer may require you to reach a minimum amount, such as $25, before you can receive a check or deposit, but you can then use this money to fund your own investments.
Consider setting up a brokerage account with low fees and no minimum deposit that you can add to as you earn rewards.
The bottom line
Borrowing money to invest in the stock market can cost you more in interest than any returns you may realize. If you want to start investing in stocks, only put in as much as you can afford today, and assess all the risks beforehand.
While it may be tempting to buy stocks using a credit card, doing so is risky and could lead to bigger debt or open you up to potential fraud. It’s wiser to leverage your card in other ways to earn on your spending, such as using cash back rewards to invest or connecting your card to an investment app.
*Information about the Fidelity® Rewards Visa Signature® Credit Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
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