Can You Use A Credit Card To Buy Gold? Here’s What You Should Know | Business News

Last Updated:July 12, 2025, 12:50 IST

The Reserve Bank of India has imposed restrictions on gold purchases made through credit cards.

Buying gold with a credit card can be an option.

Gold is considered a timeless investment in India, valued for its cultural significance and financial stability. This highly sought-after asset serves as both an inflation hedge and a portfolio diversifier. As of July 12, 2025, gold prices have dipped to around ₹99,860 per 10 grams in Delhi due to easing geopolitical tensions and market recalibration. Despite this, gold continues to be a popular investment choice.

But investing in gold requires a significant amount of money, which can be intimidating for many. Buying gold with a credit card can be an option, offering convenience and instant ownership. Investors are increasingly turning to credit cards to purchase gold, but it’s essential to understand the regulations, fees, and risks involved.

CA Pranit Jain, Director at FPA Edutech, advises against using credit cards for investments without discipline and timely payments, citing high interest rates (36-42 per cent annually) and additional charges. “Credit cards are meant for people who are extremely disciplined and make payments on time. While collecting reward points is a great use case for credit cards, failing to pay on time can quickly turn into a 24-karat regret. Avoid making investments using credit,” Jain was quoted as saying by Mint.

Rohan Bhargava, co-founder of CashKaro & EarnKaro, suggests using credit cards smartly and with caution and recommends repaying in full or using zero-cost EMIs to avoid debt traps.

Regulations and Restrictions

The Reserve Bank of India has imposed restrictions on gold purchases made through credit cards to help in conserving the nation’s gold reserve. It includes:

– No conversion of gold transactions into equated monthly installments (EMIs)

– No credit card payments for gold coins at bank branches

While these regulations primarily target gold coins, some banks have also withdrawn EMI options for jewelry transactions. As a result, credit card users should verify with their credit card issuing institutions for the latest policy rules and updates.

Fees and Hidden Costs

Purchasing gold with a credit card can incur additional fees, which are often referred to as the swipe fee. Charges may differ across banks and merchants. Before making a gold purchase, always check with your card issuer to ensure you have the most recent terms.

Processing/swipe fee: up to 3.5 per cent per transaction, which varies by merchant

Interest charges: If the complete payment is not made by the due date, the standard credit card rates will apply

Late payment penalty: Extra costs if the minimum due isn’t paid on time

No EMI conversion: Most banks prohibit EMIs for gold purchases, particularly gold coins

Foreign transaction fee: Applicable when purchasing from international gold suppliers

Rewards and Benefits

Despite restrictions and fees, some credit cards offer attractive rewards on gold and jewelry spending, such as cashbacks or reward points on purchases from specific merchants. Remember, these deals are subject to terms and conditions, as well as quarterly caps.

Security and Convenience

Using a credit card for gold purchases provides security and convenience in comparison to carrying large sums of cash. It offers protection against fraud, theft, and non-receipt of goods. Additionally, the convenience of tracking costs and processing payments online enhances the attractiveness.

Conclusion

Purchasing gold using a credit card has both benefits and potential drawbacks. Before using a credit card for gold purchases, investors should discuss their investment goals and long-term aspirations with a certified financial advisor. Before purchasing gold with a credit card, customers should thoroughly understand the associated terms and conditions. They must make timely payments to avoid high interest rates and additional charges associated with late or missed payments.

Business Desk

A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More

A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More

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Delhi, India, India

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