Buy Gold with a Credit Card: A Guide for Smart Investing

Gold holds a special place in India, as both a time-honoured cultural tradition and a smart investment choice. However, it is associated with a high price tag and that can be intimidating for a lot of people who do not have enough resources for such an investment. That’s where credit cards can step in and lend you a helping hand.

Credit cards allow you a greater purchasing power, and stagger the due amount across a period of time, making it an ideal option for a large investment, such as Gold. This blog will delve into how you can buy gold with a credit card, including its advantages and things to look out for during transactions.

How to Buy Gold with a Credit Card

Here are the steps to follow when buying gold with a credit card:

• Start by finding a reputable gold dealer or platform that accepts credit card payments. Look for dealers with positive customer reviews and seek recommendations from friends or family to help you identify reliable sources. In addition, use the ‘BIS Care App created by the Bureau of Indian Standards (BIS) that allows you to verify the purity of hallmarked gold jewellery in real time.

• Once you’ve found a few dealers that appear reliable, you should then compare prices and reviews. Don’t forget to compare prices from different sites since pricing can vary from dealer to dealer.

• Verify that your chosen dealer accepts credit cards, as some may not due to the processing fees or other factors.

• Check your credit limit to ensure that it can cover the cost of the gold purchase, including any applicable fees. Review your credit card agreement to understand the interest rates, repayment terms, and any additional credit card fees.

Benefits of Buying Gold with a Credit Card

1. Convenience and Accessibility

A key advantage of buying gold with a credit card is the ability to respond quickly to favourable market conditions, such as low prices. By staying informed and monitoring trends, you can purchase gold without delays typically associated with traditional banking methods, which may lead to missing out on favourable pricing opportunities.

Many credible dealers accept credit cards, but be sure to conduct thorough research on their credibility and any associated fees to ensure a secure and cost-effective transaction.

2. Option to Convert it in EMI

Many jewellery stores nowadays also have the option to buy gold on EMI with a credit card. However, these stores may charge interest for this service. On the other hand, issuers like One Credit Card allow you to convert expenses above ₹2500 into EMIs without incurring additional interest.

Also Read: How to Convert Credit Card Payment to EMI?

3. Building Credit and Earning Rewards

Purchasing gold with a credit card can contribute positively to your credit history, provided you make timely repayments. This improves your credit score and boosts your chances of securing future loans and other financial assistance.

Additionally, almost all credit cards offer cashback, reward points, or other incentives for purchases. Credit card issuers like One Credit Card take these benefits further by providing 5X rewards on your top monthly spending category.

So, during special occasions like wedding seasons or festivals, where jewellery purchases are common and retailers often have discounted prices, you can strategically plan your credit card usage to make the most of this benefit.

4. Security and Fraud Protection

It takes months and years to save up for investments like these. Therefore, when you finally make your purchase, you want to ensure your transaction is as safe as possible.

Credit card providers offer various safety measures, fraud protection against unauthorised purchases, and purchase protection (up to a certain amount), which can cover you in the case of theft, damaged products or other potential shipping issues.

Also Read: How To Protect Your Credit Card Information Online

Factors to Consider When Buying Gold with a Credit Card

There are a few factors you must consider when buying gold with a credit card:

1. Credit Limit

Your credit limit determines the maximum amount you can spend on your credit card. Before making a gold purchase, ensure that the cost doesn’t exceed your available credit. Ideally it is recommended to keep your credit utilisation low to maintain a healthy credit score.

2. Interest Rate

Be mindful of your credit card’s interest rate when buying gold. If you fail to pay off your balance in full each month, the remaining balance will accumulate interest, increasing the overall cost of your gold purchase and starting a potential debt cycle.

3. Repayment Plan

Understand the repayment terms of your credit card, including minimum payments and due dates. Late payments can result in additional fees and negatively impact your credit score.

4. Process Fee

Some Credit card issuers charge processing fees for EMI transactions. This can increase the overall price of your transaction.

If you have ever asked yourself, “Can I actually buy gold with my credit card?” then the answer would be a clear yes. As we have discussed in this blog, buying gold using a credit card has several benefits such as convenience, credit-building, or valuable rewards. But to make it work you need to consider factors like credit limits, interest rates and payment terms.