Can I Buy Gold Using Credit Card in India?

Gold and credit cards are two things Indians love, but they are rarely in the same sentence. One is a symbol of wealth, the other of convenience. Put them together, and you've got a shiny new way to spend, literally.

With over 110 million credit cards in circulation and more than 25,000 tonnes of gold tucked away in Indian households, it's no surprise that people are asking, "Can I just swipe and buy gold?" The short answer is yes. But like most things in personal finance, the real answer needs a little unpacking.

While buying gold using a credit card might sound like the ultimate financial hack, it comes with its own price tag, sometimes in fine print. From interest rates that go as high as 42% per annum to merchant fees and credit score dips, there's a lot more to this glitter than meets the eye.

This article breaks it down into what works and what doesn't, and how to make smart choices if you decide to go the swipe-to-shine route.

Table of Contents

• Can You Really Buy Gold with a Credit Card?
• Benefits of Buying Gold Using a Credit Card
• Downsides of Buying Gold Using a Credit Card In India
• Decoding the Cost of Buying Gold Through Credit Cards
• Buying Gold Through a Credit Card? Here's How EMI Can Help
• The Process: How to Buy Gold with a Credit Card
• Can I Buy Gold Using a Credit Card Without Hurting My Credit Score?

Can I Buy Gold Using Credit Card in India?

Absolutely! In India, most major jewellery stores and even online gold platforms happily accept credit cards for purchasing gold jewellery, coins, and even digital gold. Some dealers or platforms may not accept credit cards due to processing fees or risk concerns. However, the Reserve Bank of India (RBI) doesn't explicitly prohibit buying gold with credit cards. 

Additionally, there are certain guidelines for gold loans and cash transactions that indirectly influence how you might approach this.

For instance, there are strict limits on cash transactions for gold purchases: 

• You cannot buy gold in cash for more than ₹2 lakh in a single day or for a single transaction. Any amount above this must be paid through non-cash methods such as credit card, debit card, cheque, bank transfer, or digital wallets.
• For gold purchases over ₹50,000 (in a single transaction), you must provide your Permanent Account Number (PAN). This is a KYC (Know Your Customer) requirement enforced on jewellers and applies to both cash and non-cash transactions.

So, using a credit card for larger gold purchases is actually quite convenient for compliance.

While direct RBI guidelines on credit card usage for gold purchases aren't as prominent as those for gold loans, the general rules around credit card transactions, such as interest rates and processing fees, certainly apply.

Benefits of Buying Gold Using a Credit Card

Why would you choose plastic over hard cash for your gold obsession? Well, there are a few compelling reasons that might just make you swipe right:

• Instant purchase power: Ever seen gold prices dip unexpectedly and wished you could pounce? A credit card gives you immediate buying power, allowing you to seize those fleeting opportunities without waiting for funds to clear.
• EMI options: This is a big one for many. Instead of a hefty one-time payment, many jewellers and credit card issuers allow you to buy gold on a credit card EMI. This lets you spread the cost of your gold purchase over several months, making it more manageable on your wallet.
• Reward points & cashback: Who doesn't love a little something extra? Many credit cards in India offer attractive reward points, cashback, or special discounts on jewellery purchases, especially during festive seasons. Imagine earning points on your gold that you can later redeem for travel, merchandise, or even more gold.
• Security and fraud protection: Online or offline, credit card payments come with a layer of security. Providers offer fraud protection against unauthorised transactions and even purchase protection, safeguarding your shiny new acquisition from theft or damage.
• Building credit history: Responsible use of your credit card for significant purchases like gold, coupled with timely repayments, can positively impact your credit score. A higher credit score opens doors to better financial products in the future.

If you plan it right, buying gold with a credit card can work in your favour. The perks are useful, and the process is fairly straightforward, so you can keep an eye on the charges and make sure your repayments stay on track. That's really all it takes.

Downsides of Buying Gold Using a Credit Card In India

Alright, let's be real. It's not all sunshine and glitter. Using your credit card for gold comes with its own set of potential pitfalls:

• Interest charges: The biggest villain of them all. If you don't pay your credit card bill in full by the due date, you'll be hit with hefty interest charges, typically ranging from 35% to 45% per annum. This can quickly inflate the actual cost of your gold.
• Transaction fees/processing fees: While not always explicit, some merchants or even credit card issuers might levy a processing fee or transaction charge on large purchases, including gold. Always check before you swipe.
• Credit limit hit: A large gold purchase will eat into your available credit limit, potentially impacting your Credit Utilisation Ratio (CUR). A high CUR can negatively affect your credit score.
• Debt trap potential: If not managed wisely, using a credit card for gold can lead to a debt trap, especially if you rely on minimum payments. The interest accumulates, and suddenly, that golden dream turns into a financial nightmare.
• No reward points: Some credit cards specifically exclude gold and jewellery purchases from earning reward points or cashback. Always check your card's terms and conditions to avoid disappointment.

So before you swipe, pause and do the math. A credit card can offer convenience, but only if you're clear on the fine print. Costs can add up fast, and once you're in, it's not always easy to step back. Make sure the shine is worth the spend.

Decoding the Cost of Buying Gold Through Credit Cards

Gold may hold its value over time, but buying it with a credit card brings in costs that can quietly add up if you're not paying attention.

 It's easy to get swayed by the convenience and flexibility, but the real price tag often sits in the details—fees, interest, and fine print. Before you swipe, it helps to know exactly what you're paying for. 

Here's a breakdown of the typical costs involved when buying gold through credit cards:

Common Credit Card Fees & Charges

Fee/Charge	Description	Typical Range (India)
Annual Fee	Charged for holding the card annually. Often waived based on annual spending.	₹0 to ₹10,000+
Interest Rate (APR)	Applied to outstanding balances if the full amount isn't paid by the due date.	35% to 45% per annum
Cash Advance Fee	Charged for withdrawing cash using your credit card. Avoid this for gold purchases.	2.5% - 3% of the amount (min. ₹250-₹500)
Late Payment Fee	Applied if you miss your payment due date. The fee is usually tiered based on the outstanding amount.	₹100 to ₹1,300+
Overlimit Fee	Charged if your outstanding balance exceeds your credit limit.	₹500 - ₹700
Forex Markup Fee	Applied to international transactions (if you buy gold from an international online store).	2% to 3.5% of transaction
EMI Conversion Fee	A one-time fee charged by the bank to convert a purchase into EMIs.	1% - 2% of transaction, min. ₹99
GST	18% GST is applicable on interest charges, late payment fees, and other service fees.	18%

Important note: While a direct "gold purchase fee" isn't common, the general credit card charges mentioned above apply. Also, remember that gold itself attracts a 3% Goods and Services Tax (GST) on the purchase price, regardless of the payment method. Making charges for jewellery can also add significantly to the overall cost, typically ranging from 8% to 25% or more.

Buying Gold Through a Credit Card? Here's How EMI Can Help

Not everyone wants to pay a lump sum, especially when prices are high. That's where EMI options step in, offering a way to split the cost into manageable chunks. It's a popular route for many buyers who want the gold now, without draining their bank balance all at once. Let's look at how it works and what to keep in mind.

How Credit Card EMIs for Gold Work:

When you opt for EMI, your gold purchase amount is divided into smaller, fixed monthly payments over a chosen tenure (e.g., 3, 6, 9, 12, 24 months). This allows you to pay for the gold over time instead of in one go.

Types of EMI Options:

• Merchant EMI: Offered directly by jewellers at the point of sale. They often have tie-ups with banks to provide no-cost EMI options (where the interest is typically borne by the merchant) or low-interest EMIs.
• Bank EMI conversion: You can convert a large credit card transaction into EMIs after the purchase. Most banks offer this facility through their net banking portals, mobile apps, or customer service.

Things to Watch Out For with EMIs:

• Interest rates: While "No-Cost EMI" sounds appealing, always read the fine print. Often, the interest is simply factored into the price or offered as a discount. For post-purchase EMI conversions, banks will charge an interest rate, typically lower than the standard credit card interest but still significant (e.g., 12% to 18% per annum).
• Processing fees: Most banks charge a processing fee for converting transactions into EMIs.
• Foreclosure charges: If you decide to close your EMI loan before the tenure ends, the bank might levy a foreclosure charge.

EMIs can make it easier to buy gold using a credit card, but they work best when you know exactly what you're signing up for. Take time to understand the interest rates, fees, and repayment terms. A well-chosen plan can help you manage the cost without any unpleasant surprises later.

The Process: How to Buy Gold with a Credit Card

Using a credit card to buy gold has become a common option for many buyers. The process is simple and doesn't require much effort. To buy gold with credit cards, you can follow a few standard steps, whether you're shopping online or at a physical store.

1. Choose your gold: Decide whether you want physical gold (jewellery, coins, bars) or digital gold.
2. Select a reputable seller: For physical gold, choose a trusted jeweller (e.g., Tanishq, Kalyan Jewellers, Malabar Gold & Diamonds). For digital gold, platforms like SafeGold, Paytm Gold, or Google Pay Gold are popular.
3. Check credit card acceptance: Confirm that the jeweller or online platform accepts credit cards. Most major ones do.
4. Verify your credit limit: Ensure your credit card has a sufficient limit to cover the purchase.
5. Make the payment:
   • Offline: At the store, inform the cashier you'll be paying by credit card. Swipe/tap your card and enter your PIN.
   • Online: During checkout, select "Credit Card" as your payment method. Enter your card details (number, expiry date, CVV) and complete the transaction with a One-Time Password (OTP) or other authentication methods.
6. Opt for EMI (if desired): If buying physical gold, ask the jeweller about available EMI options at the point of sale. For post-purchase EMI conversion, contact your bank after the transaction is complete.
7. Keep records: Always retain your transaction receipt, bill, and any EMI statements for your records.

Once the purchase is complete, your gold is secured and your payment is logged. Choosing to buy gold using a credit card can be smooth and convenient when you follow the steps carefully. Just remember to track your spending and repayments to stay in control of your finances.

Can I Buy Gold Using a Credit Card Without Hurting My Credit Score?

Using your credit card for gold can have both a positive and negative impact on your credit score, depending on how you manage it.

Positive impact:

• Responsible usage: If you use your credit card for a substantial gold purchase and consistently pay the full outstanding amount on time, it demonstrates responsible credit behaviour. This can contribute to building a strong credit history and a higher credit score.
• Credit mix: Having a diverse credit mix (e.g., credit cards, personal loans, home loans) is generally viewed favourably by credit bureaus. A well-managed credit card can add to this mix.

Negative Impact:

• High Credit Utilisation Ratio (CUR): A large gold purchase will significantly increase your CUR (the ratio of your outstanding balance to your total credit limit). A CUR above 30% is generally considered unhealthy and can pull down your credit score.
• Missing payments/defaults: If you fail to make timely payments or default on your credit card EMIs, it will severely damage your credit score, making it difficult to obtain credit in the future.
• Accumulating debt: If you only pay the minimum amount due, the outstanding balance will attract high interest, leading to a spiralling debt that can negatively impact your financial health and Credit Score over the long term.

Pro-Tip: If you're going for a large gold purchase on your credit card, consider making a partial payment upfront if possible to keep your CUR lower. And for heaven's sake, pay your bills on time!

Conclusion

Buying gold with a credit card can work well if you know what you're doing. It gives you quick access, the option to split payments into EMIs, and sometimes even a few extra perks like cashback or reward points. For many people, it's a simple way to grab a good deal without dipping into their savings all at once.

But it's important to go in with your eyes open. Credit cards can turn expensive if you miss a payment or ignore the fine print. Interest rates are high, and extra charges like processing fees or EMI conversion costs can quietly add to the bill. Before you swipe, make sure your card offers decent terms, your credit limit is enough, and you've got a clear plan to pay it off on time.

If you're thinking of using a credit card for gold or other big-ticket purchases, the right card can make a real difference. That's where Finology Select comes in. It helps you to choose the best credit cards based on features, fees, and rewards, so you can find one that actually fits your needs. After all, the smartest buys aren't always about timing, they're about choosing well.

FAQs: Your Burning Gold-Credit Card Questions Answered

1. Can I buy gold coins with a credit card in India?

Yes, most jewellers and online platforms allow you to purchase gold coins using your credit card. However, keep in mind that historically, RBI had discouraged banks from accepting credit cards for gold coin purchases at their branches, so stick to jewellers or dedicated gold selling platforms.

2. Is there a transaction limit for buying gold with a credit card?

While your credit card itself has a credit limit, there aren't specific separate transaction limits set by the RBI for gold purchases. However, for cash purchases of gold, the limit is ₹2 lakh, and for any purchase above ₹50,000, your PAN is required.

3. Do all credit cards offer rewards on gold purchases?

Not necessarily. While many do, some credit cards might exclude gold and jewellery from their reward programs. Always check your card's terms and conditions or the specific merchant offer before assuming you'll earn points.

4. What is Digital Gold, and can I buy it with a credit card?

Digital Gold is a way to invest in 24K pure gold online, typically in small denominations, without needing physical storage. Yes, most platforms offering digital gold (like SafeGold, Paytm Gold) accept credit card payments.

5. Can I convert my gold purchase into no-cost EMI?

Some jewellers offer no-cost EMI schemes during specific promotions or festive seasons. Always scrutinise the terms to ensure there are no hidden charges or inflated prices that offset the "no-cost" aspect.

6. What are the RBI's latest guidelines on gold loans in 2025?

The RBI's 2025 gold loan guidelines introduce a tiered Loan-to-Value (LTV) system: up to 85% LTV for loans up to ₹2.5 lakh, 80% for loans up to ₹2.5–5 lakh, and 75% for loans above ₹5 lakh. 

Borrowers must provide proof of gold ownership or a signed declaration if unavailable. Gold ornaments pledged per borrower cannot exceed 1 kg, and gold coins are limited to 50 grams, only if issued by banks and 22 carat or higher. 

No income proof is needed for loans up to ₹2.5 lakh, but loans above that require repayment capacity checks. Gold must be valued at 22-carat market rates, adjusted for lower purity if applicable. Bullet repayment loans must be cleared within 12 months. Loans against bullion or repledged gold are not allowed.