How to buy AIM shares using a credit card @ 0%?

sarbaloosa

If I have a credit card that gives me 0% for 18 or 20 months on card purchases, is it possible for me to use a broker and purchase AIM shares with the limit and qualify for the 0%?

Thanks,

bowlhead99

The brokers I know take debit cards not credit cards - you need to actually have cash to pay for the shares. You're not buying goods and services, but financial assets.

You may find spreadbetting betting firms that allow you to pay down your account with credit cards - but would levy a chunky credit card fee versus a debit card payment which is truly "as good as cash". Also on top of that, the credit card firms usually have clauses to prevent you using the cards as cash - e.g. if you're buying foreign currency or buying casino chips or paying gambling debts, the transaction attracts a "cash advance fee" just like if you took out cash from an ATM. Instant fee and interest charges instantly - no 50-day interest free period, no introductory 0% deal.

So this sounds like a non-starter to me.

An easy workaround is to, for example, pay all your living costs for a couple of months your card, and use your normal salary to buy the shares. That way you get the shares and you get a nice big balance on your credit card. So might achieve your goal but obviously limited by how much of your personal-life running costs you can put on a card (likely not rent, mortgage etc).

Worth pointing out, it's a pretty risky plan buying volatile shares with borrowed money.

sarbaloosa

Good point man, I like it.

So ill just use my CC to pay for bills for a few months and blast my entire salary on the shares. 10 grand over a few months and then 14 months to pay that back @ 0%. Boom I love you!

sarbaloosa

Whoa one thing - will the card lender treat me paying bills, rent, etc. and treat the transactions as card purchases?

I know the limitations surrounding Foreign Currency, Gambling etc. but surely I can use the card to bang out the other stuff?

Any site or list you know of online that shows what doesnt qualify as a card purchase?

George_Michael

sarbaloosa wrote: »

Any site or list you know of online that shows what doesnt qualify as a card purchase?

As this may well differ between card issuers, the only way to know for sure is to read the smallprint on the issuers website or phone them up or send an e-mail and ask them.

bowlhead99

Also good luck finding a landlord that takes credit cards, I've had that before when living overseas and renting from a big property management group which was pretty nice, but your typical private landlord isn't going to take ccs.

As a side note, if you struggle to burn through spending quick enough to maximise value on an interest free purchases credit card, you might be better just finding one that lets you do interest free balance transfers to a current account. There is always a fee for doing this but if your goal is to make speculative investments in AIM shares, you are perhaps looking to gain or lose 80% in your borrowed money so whether it is interest free or costs you 3% for the year or two, the risk is not massively changed in terms of what you might win or lose.

Reaper

bowlhead99 wrote: »

you might be better just finding one that lets you do interest free balance transfers to a current account.

If you mean even when your account is in credit then sadly none of those are left now. I used to be a huge "stoozer" as it is known and the Egg Money credit card was the key. Now that has gone, balance transfers fees have been added, wild credit limits cut, and low interest rates don't help so I don't bother any more. Good while it lasted though - it helped me pay off my flexible mortgage rapidly by slashing interest payments. At its peak I had £80,000 on 0%!

Vortigern

sarbaloosa wrote: »

... blast my entire salary on the shares. 10 grand over a few months and then 14 months to pay that back @ 0%. Boom I love you!

Which shares are you planning to buy?

bowlhead99

Reaper wrote: »

If you mean even when your account is in credit then sadly none of those are left now. I used to be a huge "stoozer" as it is known and the Egg Money credit card was the key. Now that has gone, balance transfers fees have been added, wild credit limits cut, and low interest rates don't help so I don't bother any more.

The Egg Money one which used to advertise that you could transfer to clear an overdraft but in reality just let you transfer it into your bank account to do whatever you liked with... became Barclaycard Cashback. I still get promo offers from them to transfer to current account although the interest free periods are shorter than the 'transfer from other card' option (I think the latest one was only to June 2015). I think they cap your transfer at 90% of the remaining credit limit but perhaps it's also capped at 90% of the card limit so that you can't artificially create a huge remaining credit limit by overpaying.

MBNA was the other big group that supported transfers to bank accounts. They're the back end of a lot of different branded cards. But they do still support transfers to current accounts:
http://www.mbna.co.uk/credit-cards/mbna-credit-card/

Balance Transfers
Transfer existing credit and store card balances onto one card and manage just one monthly payment1. Take advantage of 0% interest for up to 32 months from account opening (2.69% handling fee, £3 min). This offer applies to balance transfers made within the first 60 days.
Money Transfers
Transfer funds from your credit card account to your current account - enjoy 0% interest for up to 32 months from account opening (4% handling fee, £3 min). This offer applies to money transfers made within the first 60 days

So there are always fees (but 4% on 32 months is not much per year), and maybe the limits aren't as high as they once were but if you want cheap finance you can still get it. You just can't make a lot of money off it by simply putting the cash in a current account -because the low interest rate environment that allows them to give you 32 months of cheap finance also means that any zero risk account is not going to pay you much interest after tax.

Reaper

Thanks. I've been a bit out of touch since I stopped doing it so it's interesting to hear there are still cards that allow current account transfers. Not the easy money it was but just about viable. If anybody is interested in the subject there is an MSE forum dedicated to the topic here:
http://forums.moneysavingexpert.com/forumdisplay.php?f=95

sarbaloosa

bowlhead99 wrote: »

Also good luck finding a landlord that takes credit cards, I've had that before when living overseas and renting from a big property management group which was pretty nice, but your typical private landlord isn't going to take ccs.

As a side note, if you struggle to burn through spending quick enough to maximise value on an interest free purchases credit card, you might be better just finding one that lets you do interest free balance transfers to a current account. There is always a fee for doing this but if your goal is to make speculative investments in AIM shares, you are perhaps looking to gain or lose 80% in your borrowed money so whether it is interest free or costs you 3% for the year or two, the risk is not massively changed in terms of what you might win or lose.

Help regarding your side note?

So I have a current account with a high overdraft and then using a 0% balance transfer credit card and push the balance to it at 3%?

I thought you could only use 0% balance transfers between credit cards and not current to credit?!

Which cards allow current to credit?

Thanks,