Gold is a popular investment choice in Indian households as it also holds cultural significance. In addition to providing a hedge against inflation, it also serves as a tangible asset for security in case you’re getting credit.
In today’s digital age, you can buy gold with a credit card. This way, you can invest easily without the immediate financial burden of paying the full amount upfront. But remember, while this is an easier way to invest in gold and has various other benefits, it also comes with its own set of limitations.
Advantages of Using a Card To Purchase Gold
By getting gold with a credit card, you enjoy a plethora of benefits, such as:
- Split bills: By getting gold this way, you can opt for the EMI option for repayment, which allows you to spread the cost across several months or years. This way, you can still make the asset your own without making the payment in one go.
- Convenience: Using a credit card to purchase gold is a simple process. You can purchase the asset online or in a store, without any hassles.
- Rewards: You can earn points or save with cashback on your gold purchases with some cards. This makes the purchase cheaper and adds additional value to the investment.
Disadvantages of Buying Gold This Way
Here are some limitations associated with getting gold through this method:
- High Interest Rates: Large purchases like gold this way can acquire a high interest rate and additional charges. If you’re going through the EMI route, make sure to pay the card bills on time. If you don’t pay it off by the due date, you’ll have to pay a lot of extra interest charges.
- Limited Reward Eligibility: Some cards might not give you rewards for buying gold. So, you might miss out on benefits if your card doesn’t cover gold purchases.
- Added Charges: In addition to the interest on the total amount, you may need to pay some other fees and charges. Some merchants may charge extra fees for big transactions like buying gold. These fees can make your gold purchase more expensive.
Process of Buying Gold with a Credit Card
Looking to buy gold with a credit card? Here’s a simple guide to help you out:
Step 1: Choose the Asset Type
Decide whether you want to buy gold jewellery, coins, or bars based on your goals or preferences. Each type has its own price and considerations, so think about what works best for you.
Step 2: Go with a Credible Seller
Look for a trustworthy gold seller that accepts credit card payments. Be sure to inquire about any additional fees. Check reviews and certifications to make sure they’re legit.
Step 3: Understand Your Credit Card
Always use a card that has a low interest rate or zero joining or annual fees; this can help you out in the long run. By choosing the right card, paying bills on time improves a good CIBIL. Look at your card’s terms and other essential information.
Also, check your issuer’s website during the festive seasons like Dhanteras or Diwali to see if there are any rewards or benefits for this kind of purchase. Also, be aware of any fees for using your card to buy gold.
Step 4: Make the Purchase
If you follow the online purchase, make sure of that fact to use a secure website to make payment.
Once you’ve chosen your gold and payment method, proceed with the transaction. Always be sure to check the details before making the payment. If you opt for the offline method, try to be confidential about the card details.
Step 5: Manage Your Payments
As you know, large purchases come with high interest rates. So, if you buy gold on credit, you must be very responsible about managing your payments.
To avoid high interest charges, aim to pay off the balance in full by the due date. Also, don’t forget to monitor your card statements periodically.
Step 6: Consider Other Options
A credit card on FD can be an excellent option for purchasing gold assets. If you’re worried about high interest rates and if buying gold this way doesn’t work for you, explore other payment methods like bank transfers or cash.
Buying gold through this payment method offers convenience and rewards. But it comes with high interest rates and additional fees. For a flexible approach to credit management, consider the One Credit Card.
Whether you buy gold or make other transactions, this card is a smart choice. With a 5X rewards plan on the top two spending categories, this card is exceptional. It also has a GPS to find out offers at your nearest shopping stores.
The app provided by The One Credit Card helps you pay bills on time through smart management. If you cannot pay in lump sum, you have the option to convert it into no-cost EMIs as well. Apply now and enjoy the benefits of this lifetime-free credit card.
