Having been on this forum for a little more than a year... I know many of you are avid investors- there's been enough threads about picking the right stock broker. It also goes without saying that almost everyone here loves credit card rewards; so the natural question here is: can I buy stock and get credit card points/rewards for it? Of course, the ONLY way to do that which works would be to PIF or use a card with an intro 0% APR otherwise the interest would eat up your rewards pretty quickly. Until recently, I thought it wasn't possible until last week, when I stumbled upon loyal3.
So how does it work? It kind of works using the same principle as Sharebuilder or perhaps like many DRIP programs. You just put in what stock you want to invest in, how much you want to invest (minimum $10), and pay with your credit card (or bank account, but how fun is that?) and then you're getting rewards for buying stock. By now, you might be asking what the commission is... that might be the best part- there is none! So right off the bat- you're coming out ahead(as long as you understand the "spread" between ask and buy price goes with stock buying territory).
Downsides? Well, first of all there are only about 50 stocks you can choose from but they're almost all blue-chip
stocks some of which have traditionaly been long term investements (Coca-Cola, Berkshire Hathaway, Disney, Apple, and Google) and every stock is from a company which is a household name. Another downside is that the trading process happens slowly- it takes about a week or so from start to finish to buy a stock, so for those of you who like to time the market- you can't really do that with loyal3. So for many of you, those two things might be a deal breaker.
But if you're like me, you don't believe in sticking to one broker. I use Schwab and Ameritrade for their fee free ETF's. I use sharebuilder for cheap market trades of midcaps , I invest in a few no-load index funds directly with the mutual fund companies and I have a few "motifs" with motif investing because it's a fun way to "create your own mutual fund". I've already started investing with loyal3 a few days ago because there are some large companies I'd like to invest in long term. I'll keep you guys posted on my experiences. So far, all I can say definitively is that the transaction is charged as a purchase, not a cash advance which had been one of my concerns.
In my Wallet:
Sometimes in my Wallet:
- Amex PRG NPSL[3-14, bd 91]
- Sallie Mae MC $8000[1-14]
- Chase Freedom $4700[1-14]
- Discover It $2750[8-13]
- BoA UCF Alumni Cash Rewards $5000 [3-15]
- GM BuyPower WEMC $5000[9-14]
- Wells Fargo Propel 365 Amex $7000[4-14]
- Barclaycard Arrival WEMC $7000[3-14]
- BoA Better Balance $3000[2-15]
In my sockdrawer: Amex BCE $1000[10-13, bd 91], OCCU Duck $10000 [11-13], The Sportsman's Guide Visa $8000[8-14], Chase Slate $4000 [9-14]Delta Gold Amex $2000 [2-15 bd 91], Diners Club MC $20000 [10-14] Commerce Bank Visa $2000 [3-15] Citi Double Cash $1000 [3-15]
Total CL: $90450