Credit Card Brokers 2021 - Which Brokers Accept Credit Card?
Credit cards are among the most popular and convenient payment methods globally. Credit card transactions are accepted by most merchants, including the best day trading brokers. Existing cardholders can deposit funds into FX trading accounts in just a few clicks. Our review details the benefits and drawbacks of trading with credit cards, including fees, limits and deals.
Credit Card Brokers
Credit Card Headlines
First coined by Edward Bellamy in 1887, credit cards have evolved into a leading payment method used worldwide. Millions of daily transactions are carried out by major companies, including Visa, MasterCard, Maestro, and American Express. The payment method allows instant transactions within a secure online environment. It’s unsurprising then that credit cards are a top choice among traders.
Pros Of Trading With Credit Cards
Already Popular
Credit cards are popular all over the world. In 2019 alone, the UK issued nearly as many credit cards as its approximately 66 million population. This means traders from all over the world can open an account with an online broker and start trading using their credit card.
Accepted Everywhere
Credit cards are provided by multiple companies and large brands are accepted at most trading brokers. Visa, Mastercard, and American Express are particularly popular. This means you can change brokers, move countries and you’ll still be able to make deposits and withdrawals using your credit card.
Rewards
Many credit cards come with rewards such as cashback, zero/no interest, and product offers. Details of the credit cards with the best free rewards can be found in reviews online. Some brokers also offer rewards for depositing with credit cards over other payment methods. Check for the latest promos when you sign up for an account.
Credit Card Choice
There are many options to choose from when looking into credit cards. Some are good to build credit, others offer low interest, and some promise the best incentives. It’s worth checking a credit comparison website before opening an account. And always check terms and conditions before registering.
Customer Support
Generally, credit card companies provide customer support via multiple channels, from rapid response live chats and international phone numbers to extensive FAQ sections. This is good news for traders because it means support is available should you run into withdrawal issues at your broker. Moreover, credit cards sometimes provide extra security should you apply for an account with a disreputable trading broker or scam.
Cons Of Trading With Credit Cards
Risk Of Debt
Users are putting themselves at risk if they are unable to settle their credit card debt. This debt can rise significantly with associated charges and fees. This combined with the risky nature of leveraged day trading means users should be careful.
Credit Score Check
Most companies assess a new applicant’s eligibility through a credit score checker. Applications will be refused if an applicant has a history of unpaid debt and a poor credit score. However, if the trader is already a credit card holder then this shouldn’t be an issue. But for traders new to credit cards, there are a few hoops to jump through before you can deposit.
Speed
Payments with credit cards are typically instant at most providers, such as Interactive Brokers, though it can take time to appear on your statement. Brokers may also have their own payment processing times to factor in for credit card funding, but these are typically short. Withdrawals tend to take longer due to additional checks on the broker side.
Credit Card Security
Credit cards are generally a safe and secure payment method to use. Most credit card companies offer a strong level of protection in regard to fraud and misuse. They also provide integrated payment portals direct to your forex trading account for peace of mind.
Deposits & Withdrawals
No deposit is required with a credit card, holders simply pay off the money they spend at the payment date. In the context of day trading, any deposits made to a broker using a virtual credit card will be transferred immediately to the broker but the credit card will have to be settled at the payment date.
Withdrawals from credit cards are only applicable when refunds are received. In respect to day trading, if a trader withdraws funds from their account via a credit card the value of the withdrawal will show as a debit on the card. The cardholder can then request to transfer the money into the debit account associated with the card. Credit balance refunds are subject to the credit card’s processing times.
Check for minimum payment terms at your broker prior to making payment.
Fees
The biggest fee applicable is the annual percentage charge which is the rate charged for borrowing funds. This fee is charged on any debt remaining on the credit card at the end of each month. APR can range from 5% to 75%, so it can be a costly expense to miss a credit card payment.
Credit card annual membership fees vary from company to company. Cards that are free to join such as the Platinum Mastercard by Captial One typically have lower credit limits and fewer rewards than fee-paying cards. Credit cards with better rewards and higher credit limits tend to have a membership fee, which can range from $1 to over $100.
Brokers also have their own payment fees. Deposits are usually free, but withdrawals can come at a cost. Check with your broker before making a payment.
Are Credit Cards A Good Choice For Traders?
Credit cards are a strong payment option for traders. Existing cardholders will be familiar with their ease of use for day trading. But clients who are considering signing up for a credit card for forex trading should first consider the risks and fees.
FAQ
How do credit cards work?
A credit card company will pay upfront for any spending done on the card. At the end of the month or on an agreed payment date, the cardholder will then be required to settle the debt.
What if I can’t pay off my credit card at the agreed payment date?
Credit cards can have excessive fees and charges for any unsettled debt which could cause debt to increase. Missing a payment will also impact the holder’s credit score which could have future implications. Check the rules regarding late fees by consulting the company’s website.
Are my funds safe with credit cards?
From a security perspective, credit cards are relatively safe. Your trading funds aren’t at risk in the first instance but only spend and deposit what you can pay off. Any fraudulent spending will be handled by customer support.
What level of customer support do credit cards come with?
Typically, a very high standard of support is provided to customers, though this varies between companies. Live chat, telephone and email are typical support methods.
Do credit cards have any joining fees?
Some credit cards are completely free to join but others will charge the holder an annual membership fee which can range from $1 to $100+. Membership fees are typically contingent on the credit limit and rewards available.