I too would throw in my 2c worth against borrowing on a cc to fund share purchases.
I am not sure how many of the well known brokers actually allow you to do this but I know for a fact that the big OTC CFD providers like CMC and IG Markets do.
CMC and IG will charge your cc, minus a merchant fee, but I think this goes through as a 'purchase' rather than a cash advance (please correct me if I am wrong).
IMO there is huge risk in using cc to purchase shares full stop BUT where the real danger occurs is anyone who uses funds from a cc to purchase CFDs which only require a margin to be posted.
I say this from experience of an acquaintance who did this with AFG just prior to their trading halt. He purchased 5000 or so CFDs on AFG when they were at around $3. His provider only required him to post margin which was (say) $1500 funded from his cc. When AFG came out of trading halt they did so closer to $1.50, which meant on top of the $1500 he owed his cc company, he now owed his CFD broker a further $6000 or so. These numbers are rough so you get the gist. Remember too that CFD providers will liquidate your position at certain loss levels which means total loss of capital and no recourse.
Unless you really know what you are doing and have been doing it for some time, I urge you not to speculate any more than you can genuinely afford especially with leverage and especially on credit card.
If your position in Centro is leveraged, you are in effect borrowing to purchase a company that got into trouble borrowing to buy other companies (like New Plan, Heritage, etc).
Whichever way Centro goes, there are going to be two types of people involved: those who knew nothing and those who knew everything. Unfortunately, you are rarely able to work out which group you actually belong to until it's too late.
CNP Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
