The simple answer to this question is: yes. You can use your credit card to invest for your retirement, bonds, and even real estate. But why, you might ask, should you invest when paying off your credit card debts can already get overwhelming as it is? And if you consider the uncertain nature of investments, the choice might appear counterintuitive.
While it is true that investments are risky, why ignore the possibility of further multiplying the fruits of your labour?
Weighing Credit Card Investment Risks
Some people love taking risks more than others and those who take bigger risks are more likely to earn bigger rewards. As a general rule in making any form of investment, it is best to make a calculated risk. Observe the market, watch out for trends, and consult an expert if applicable to tilt the odds as closely to your favor as possible. In any case, there are also so-called “safe” investments, about which you can ask an investment professional. Such investments may offer modest returns but are far more secure.
Real Estate Investment
Investing in real estate poses high risks, wherever you look at it, and with a credit card, the risk could even be higher. But there are ways that you can make a real estate investment with your credit card, if you feel like taking your chances. One such example is flipping a house and selling it for a higher price. By definition, “flipping” means renovating a piece of property to increase its value in the property market. In the US, cards like Lowe’s or Home Depot offer 0% financing for 12 months and credits can be used to fund building materials to reduce flipping costs.
Retirement Fund
Retirement is one of the things everyone should definitely invest in. By the time you stop being part of the labour force, of course you’d want to live a comfortable – possibly a luxurious – life. To turn this into a reality, you would need to have saved up a substantial percentage of your life’s earnings as early as now. So if you are on the market for credit cards, you might want to look out for retirement rewards on top of the list of perks you are looking for. Some credit cards allow you to deposit cash rewards straight into retirements accounts. There are very few credit cards offering this kind of benefit, but they are available.
Paying Debts: An Investment in Itself
If you make the decision to make an investment with your credit card, you must right away structure a repayment plan that balances everything out while keeping you financially afloat. If it proves to be a bit of a challenge, MSN recommends prioritising debts with the higher interest rates. If you find that you can only pay the minimums on your debts when you try to throw an investment plan into the mix, you are obviously in deeper financial trouble than you think and should consider cutting expenses or increasing your income. It might also be time to seek the expertise of a credit counselor.
