I recently had the opportunity to write a blog post for Forbes. The subject wasn't particularly juicy; it was about selling bonds to pay off credit card debt. However, despite its rather dull topic, the moral of the story is pretty simple: don't borrow from your credit cards to fund a taxable investment account.
The story, Pay Off That Balance, Then Worry About Investing, focused on bond investments. In a nutshell, anyone with credit card debt and a balance portfolio of stocks and bonds is likely losing 10% a year because bonds yield around 4% and credit card debt costs about 14%.
What is true for bonds is also true for stocks. Yes, you may think you're holding the next Google or Berkshire Hathaway. And you may be. But the odds are against you. Thus, if you're paying your credit card company 14% interest, you'll need your stocks to return at least 20% before taxes to break even.
If you must own stocks you don't have enough cash to pay for, using margin from your broker is a much better alternative. I'm not advocating the use of margin: it can magnify losses. However, margin rates are significantly lower than credit card rates (Interactive Brokers charges less than 2%) AND you can deduct margin interest on your tax return. You cannot deduct your credit card interest.
Its easy to compartmentalize investments into one category and credit card debt in another. But if you want to get the most out of the money you have available to you, heed the advice I gave Forbes readers and dump your stocks, bonds, and by all means your 1.5% CDs. Take the money, pay off your credit cards, and save yourself a few hundred dollars.