Can you use a credit card to buy gold? Here’s what you should know before swiping
Gold remains a highly sought-after asset, especially during festive seasons and big life events. As of June 25, 2025, gold prices have recently touched around ₹1,00,853 per 10 grams in Delhi, marking a slight dip amid geopolitical ease and market recalibration. The recent decline comes after MCX futures fell by nearly ₹3,000 as a result of easing tensions between Israel and Iran.
Now with such fluctuations, due to the rapidly evolving geopolitical situation, several investors are turning to credit cards for comfort when purchasing gold. Still, before swiping, it is crucial to understand the regulations, fees, challenges and rewards attached to such transactions. Credit cards should be used with careful consideration.
Warning credit card users against improper usage of these credit instruments, CA Pranit Jain, Director at FPA Edutech says, “Credit cards are meant for people who are extremely disciplined and make payments on time. But if you can’t, be prepared for annual interest rates of 36–42%, along with late payment fees, GST, and other charges. 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.”
While discipline is key, some experts say credit cards can be used smartly, if risks are understood and managed. In the same light, Rohan Bhargava, Co-founder of CashKaro & EarnKaro, adds “Credit cards offer flexibility and rewards, but gold purchases need caution. With rates up to 36% annually if only the minimum due is paid, the debt trap is real. Always repay in full or use zero-cost EMIs. Financial discipline is essential.”
Regulatory landscape and restrictions
There have been several restrictions imposed on gold purchases made through credit cards. These restrictions have been imposed by the central bank to help in conserving the nation’s gold reserve. Notably, since the year 2013, financial institutions and banks have been instructed to not allow conversion of gold transactions into Equated Monthly Instalments (EMIs). They have also been barred from allowing credit card payments for gold coins at bank branches.
Given these regulations basically target gold coins still, jewellery purchases remain largely unaffected, though some banks have withdrawn EMI options for jewellery transactions as well. Due to the same prudent credit card users must check in with their credit card issuing institutions for the most recent policy regulations and updates.
Fees and hidden costs
One of the most serious drawbacks of purchasing gold with a credit card is the additional processing fee. It is often referred to as the swipe fee. Merchants might charge up to 3.5% or more every transaction, which can add a substantial burden to high value gold purchases. These fees are imposed to cover the cost of transaction processing and can very quickly erode the value of your purchase if not factored in the budget.
Breakdown of key charges on credit card gold purchases
| Fee type | Details |
|---|---|
| Processing/swipe fee | Up to 3.5% per transaction; varies by merchant |
| Interest charges | Standard credit card rates apply if full payment isn’t made by the due date |
| No EMI conversion | Most banks restrict EMIs on gold purchases, especially gold coins |
| Foreign transaction fee | Applicable if buying from international gold sellers |
| Late payment penalty | Extra charges if minimum due is unpaid on time |
Note: Charges may vary across banks and merchants. Always check with your card issuer for the latest terms before making a gold purchase.
Rewards and benefits
Even after the restrictions and fees, several credit cards provide attractive rewards on gold and jewellery spends. There are also provision of cashbacks or reward points at rates as high as 5% on purchases from specific merchants such as Zoya, Tanishq or Reliance Jewels.
For instance, the Titan SBI Credit Card provides up to 3% value back on Tanishq spends along with a 5% cashback on other select jewellery brands. Do remember that these offers are subject to terms and conditions along with quarterly caps. Standard Chartered Ultimate Credit Card and HDFC Regalia Gold Credit Card also permit reward points on gold purchases, making them lucrative for frequent buyers.
Security and convenience
Hence, using a credit card for purchasing gold provides a clear boost in security and comfort. Especially in comparison to carrying large sums of cash. Credit card issuing institutions also provide protection against fraud, theft and non-receipts of goods, thus making transactions safer for credit card holders.
Furthermore, the ease of tracking expenses and managing payments online further adds to the appeal. Still, as a prudent investor it is always better to discuss your investment goals, long term aspirations with a certified financial advisor before applying for a particular credit instrument or opting for a purchase through a credit card.
Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit scores. Mint does not promote or encourage taking credit, as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
