I’ve seen plenty of discussion of the idea but haven’t covered the ability to buy stocks with a credit card (and earn miles, as well as generate spend towards signup and threshold bonuses) without a transaction fee.
That’s because the particular company offering it, Loyal3, doesn’t execute orders real-time, so you aren’t buying in at an ex ante known price. So there’s some price risk. Plus it’s not really a costless way to earn miles since there’s both upside and downside in the pricing of the investments you’re buying.
I tend not to invest in individual stocks. There are very smart people who do that full-time and they get killed on it half the time. As a casual observer, even in industries where I have great familiarity, I consider myself at a disadvantage.
Instead, I buy broad-based stock mutual funds and exchange traded funds with low expense ratios.
Nonetheless, there are many people who are going big buying stocks with credit cards, and there’s now a mainstream article written about it, which the author sent along to me.
They let you fund up to $2,500 per stock using a credit card and there appears to be no monthly limit(other than the 53 stocks x $2,500). I’ve actually seen reports of people loading 25-35k/month using a credit card and then immediately selling the stocks in order to get the rewards points.
There are a shade over 50 stocks available at Loyal3, you can’t just buy anything you wish. But most are large cap stocks, some with relatively little volatility.
Certainly this works best for people who would otherwise be buying these stocks anyway, might as well do so by credit card (and you’re betting the value of the rewards outweigh pricing risk that stems from the site’s batch processing of orders).
But there are those who will buy and then turn around and sell the same shares.
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