Zheng Quan Ri Bao·2025-08-27 16:20Core Viewpoint - The use of credit card funds for stock trading is prohibited by banks and regulatory authorities due to the inherent risks and misalignment with the intended purpose of credit cards, which is for consumer spending rather than investment [1][4]. Group 1: Risks of Using Credit Card Funds for Stock Trading - Using credit card funds for stock trading significantly amplifies the debt risk for cardholders due to high borrowing costs and short repayment periods, making it unsuitable for investment purposes [2]. - Credit card funds are often accessed through cash advances or other means that incur fees several times higher than brokerage financing rates, creating a burden that requires excessive returns to cover costs [2]. - The mismatch between the short repayment cycle of credit cards and the uncertain duration of stock investments can lead to financial distress for investors [2]. Group 2: Impact on Banking and Risk Management - The diversion of credit card funds into the stock market undermines the established risk management frameworks of banks, which are based on predictable consumer behavior and spending patterns [3]. - This shift necessitates increased operational costs for banks as they must invest more resources to meet compliance requirements and manage the heightened risk associated with stock market volatility [3]. - The potential for increased default rates and bad debts due to stock market investments poses a threat to the asset quality of banks [3]. Group 3: Broader Financial Market Implications - The speculative nature of using credit card debt for stock trading can disrupt normal market operations, leading to irrational price fluctuations and undermining the price discovery process [4]. - Such practices transfer stock market risks to the banking system, increasing the overall risk exposure of the financial system [4]. - The consequences of investment losses can lead to a cycle of debt for cardholders, potentially impacting the stability of the credit market and the broader financial ecosystem [4].