As it has no end-use restrictions, you can easily buy gold using credit card. In India, gold is an integral part of culture and tradition. A popular and low-risk investment, buying gold is both a hedge against inflation and an auspicious undertaking, especially in the festive season.
This is a great option when you want to leverage the drop in the price of gold to make an investment. Thus, a credit card can be helpful if you don’t have funds readily available.
The Process of Buying Gold Using a Credit Card
While you can easily buy gold online and offline using your credit card, you need to follow a step-by-step process. Here’s everything you need to do:
- Choose the Gold Product
Different forms of gold have different prices. You will also need to select the purity of the metal that fits your needs and budget. Gold can be bought in the form of:
- Jewellery
- Coins
- Bars
- Sovereign Gold Bonds
- ETFs
- Gold mutual funds
- Check Your Credit Limit
Purchasing gold is not a small financial decision. With the rising price of gold, it is becoming more expensive by the day. If you are using your credit card for this purchase, make sure that you have sufficient balance available.
You can easily check your credit limit on net banking or the mobile banking app of the issuer. This ensures that your payment is cleared without any hassle. Since a credit card is a valuable tool for managing everyday expenses, it is best to have some balance left after buying gold as you may need it in case of an emergency.
- Research and Select a Vendor/Retailer
Once you have decided which type of gold you want to buy, you can look for a seller online or go to your local jeweller. For either option, it is important to ensure that the retailer is reliable. In the case of physical gold or jewellery, make sure the product is hallmarked.
- Understand the EMI Terms
Note that some sellers also allow you to shop on EMI. This way, you can easily fit the price of your newly bought gold product into your monthly budget. Some stores will also allow you to convert your purchase into no-cost EMIs easily.
However, before committing, understand the terms and conditions of your card. These are some key aspects to look into before you make a decision:
- Interest Rates: Check if the issuer charges interest or you can opt for interest-free EMIs
- Tenure: A longer tenure reduces your EMI burden, so you may choose the maximum tenure available for easy repayment, but this may increase your interest burden
- Down Payment: Some EMI plans require you to make a down payment or pay a processing fee, so verify this amount to ensure affordability and easy EMI conversion
- Complete the Purchase
Similar to any other type of payment, you can buy gold through online methods or by swiping your card at a POS machine. If you have an EMI plan, get a detailed breakdown before making the transaction.
- Collect the Documents
Upon successful transaction, collect your gold purchase receipt and the EMI document. This will help you manage your budget for debt-free credit card repayment. This evidence is also necessary to confirm your purchase and resolve any future disputes.
Advantages of Buying Gold with a Credit Card
Buying gold with a credit card offers several benefits, which are as follows.
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- Simple Process: Credit cards are useful for online as well as offline purchases, as you don’t need disposable cash
- Rewards and Cashback: Many credit cards offer rewards or points on buying gold which you can redeem later to enjoy additional benefits
- Flexibility: Credit cards allow you to spread the cost through EMI options, which can help you manage your budget and cash flow better
- Enhanced Security: Credit cards offer fraud protection and security features, giving you peace of mind when making significant purchases
- Building Credit History: Responsible use of your credit card, including timely payments or the monthly bill, can positively impact your credit score to simplify future borrowing
- Instant Financing: You don’t wait until you have savings to buy gold, when you can arrange quick funds up to your approved limit
Be Prudent While Buying Gold with a Credit Card
Here are a few tips that you need to consider when buying gold with your credit card:
- Explore promotional offers that provide lower interest rates and additional benefits
- Understand the terms and conditions associated with your credit card’s EMI facility to avoid any surprises
- Do not use your complete credit limit, as it can lower your credit utilisation ratio and damage your credit score
- Read the reviews of the seller and consult your family before buying gold
- Plan repayment before you complete the purchases as high interest charges on the amount you spend on gold can result in debt that may be difficult to repay
Keeping the above tips in mind will make it easy for you to buy gold using credit card. Note that if you’re not satisfied with the terms of your current card, learning how to close a credit card can be a solution. If you’re looking for a card with instant approval, you can opt for the One Credit Card and use it to buy gold and make other purchases.
It offers no-cost EMIs, so you need not worry about interest. You can easily convert your purchase into EMIs directly from the One Credit Card App. This app also allows you to manage your card anytime, anywhere easily.
To boost your savings, this credit card gives you 5X accelerated rewards on your two highest spending categories in a month. So, apply now to get the stylish metal One Credit Card!
