This has a lot of conveniences and provides a route for investors to reduce administrative work, but it also needs careful attention. This is essential because otherwise the investor can end up paying a very high price for the use.

Benefits: This will eliminate the usage of cheque and there will be no risk of the investment not going through because of some problem with the cheque or the bank. The credit card instruction will be honoured and the investor will have to settle the amount when they get the bill as per the billing cycle.

The other benefit is that even complex investment structures like scheduling four different investments on different dates in a month can be completed smoothly. This is also user-friendly for all those people who are familiar and comfortable with credit cards. Also, administrative work will come down substantially.

Never revolve: The biggest downside of using a credit card for investments is that the onus shifts to the credit card holder to avoid a financial hit. This is because the credit card holder cannot miss the payment on the card on the due date or let it slip into the revolving mode.

When this happens the interest rate kicks in and this can range anything from 36 - 42 per cent a year. And it is bad economic sense to do so simply because a mutual fund investment would give safe returns of 15-20 per cent a year in an equity-oriented scheme, unless you are going through a bull run witnessed in the last four years. Obviously, borrowing at almost 40 per cent for returns of 20 per cent is a case of simple foolishness.

Watch the circumstances: If you are already revolving a good amount, it will be a worse idea to invest through cards. The invested amount will be added to the outstanding balance and that would mean more interest payout. No wonder, the timing of the card cycle is also very important.

If the card cycle for the billing date ends a day or two after the investment, then the bill would have to be paid soon. This basically implies that the investor will not get the advantage of free credit period.

In such cases, it makes more sense to use the normal channels to invest instead of putting themselves at risk of a miss in the credit card payment and the consequent financial impact.

Nature of payment: There are two types of payments that might be possible using a credit card. There could be one time investment or monthly systematic investment plans (SIPs). The former might not matter much because it is a one- off investment and hence can be easier to track for the investor.

On the other hand, a SIP will require regular monitoring and care because they need to ensure that they pay-off the required amount each month in time. Otherwise, it would mean late payment fees being imposed on their card.

It's important that one remembers that though usage of credit cards to invest is a good idea per se, cardholders will have to manage them well to get best results.