Tdameritrade account buy stocks...?
Can i use a credit card cash advance check say i write one to myself place it into my bank account then transfer the monies to my Tdameritrade account and buy stocks... Repay the loan back over time...Is this illegal in any way.
- A nobodyLv 710 months ago
I agree with the other responders, it is not technically illegal, BUT is most certainly STUPID.
Under Federal law no broker/dealer in North America can accept a credit card for the purchases of securities
at the same time no banking institution can permit the use of their credit cards for the purchase of securities, nor can they lend monies for such purchases without collateral.
For an individual to use cash advances for the purchases of securities goes against all logic not only financially but rationally. Why would any one incur very high interest rates to buy securities with the "hope" they can make money in the market, especially since they are clueless on investment and financial strategies. .
This is one of the dumbest ideas for investing and this says a lot for Yahoo Answers.Source(s): from THE STREET
- MichaelLv 710 months ago
It’s not illegal, but it is a really stupid idea. Really stupid. Historically stocks have returned somewhere around 8% a year, and your credit card will charge you two if not three times that rate on your cash advance.
By the time you factor in commissions and capital gains on any profits you make, and it’s no given that you’re going to make profits at all, you would need to be making pretty close to a 30% return on your stock trades just to break even. It would be completely unrealistic for you to believe you’re capable of doing that.
- A.J.Lv 710 months ago
It's not illegal. But it is generally expensive. Stocks are a risk that should be with money you can afford to lose.
When you cash advance, there is normally an up-front fee and then interest on the balance.
What's more, the check you use takes time to clear before your stock trading money is available to use.