Is it possible to buy gold using a credit card?

Have you ever thought about buying gold with a credit card? This idea is actually quite appealing. Imagine being able to take home gold bars or gold certificates without immediately draining your savings; you can simply pay later or pay in monthly installments. But before trying, it's a good idea to understand the advantages and risks of buying gold with a credit card.

Can You Buy Gold with a Credit Card?

Can you really buy gold with a credit card? The answer is absolutely yes, as long as the merchant or gold shop you're buying from accepts credit card payments. In fact, they often partner with banks to offer low-interest installment plans, even 0%. But remember, not all shops accept credit cards, so be sure to call the shop, visit them in person, or check their website.

Is it possible to buy gold using a credit card?

Advantages of Buying Gold with a Credit Card

Pay in More Flexible Installments

One of the main reasons many people buy gold with a credit card is the more flexible payment options. Just imagine, you don't have to spend millions of rupiah in a single transaction. Simply pay in monthly installments, according to the chosen term, for example, 3, 6, 12 months, or even up to 24 months.

So, even if your financial situation isn't ready yet, you can still start investing in gold now. Even more interestingly, many banks partner with merchants or gold shops to offer 0% installment programs. This means customers can pay their bills in installments without any additional interest.

You Can Earn Cashback or Points

In addition to installment payments, buying gold with a credit card often offers additional benefits in the form of cashback or reward points. So, while buying gold, you can also earn "bonuses" from the bank.

For example, for every purchase of a certain nominal amount, you'll earn points that can be exchanged for shopping discounts, dining vouchers, or even direct discounts on future transactions. Some banks also offer cashback directly during transactions, especially when there are promotions at certain gold merchants.

Transaction Protection

Not all transactions run smoothly, especially when buying online. One of the advantages of credit cards is their transaction protection feature. If an error occurs, such as an item not shipped, an incorrect quantity, or a suspicious merchant, customers can file a complaint with the card-issuing bank. This process is often called a "dispute." The funds paid can be held until the issue is resolved.

Easy Access

Now, buying gold doesn't require going to a store and queuing. Using your smartphone, you can instantly check the gold price, select the type, and pay with your credit card in minutes. Several official platforms also offer credit card payment options and installment features directly within the app. Investing in gold has become easier and hassle-free.

Risks to Be Aware of

High Interest If You Don't Pay in Installments

While it's very easy to pay with a credit card, there are risks to be aware of if you don't convert your gold purchase into a fixed installment plan. If you only pay the minimum amount and don't convert the transaction into installments, the interest charged can be quite significant.

For example, if you buy gold worth IDR 5 million and don't convert it to installments, then you can only afford the minimum payment. Within a few months, your total bill could balloon. However, gold investments generally provide long-term returns with stable increases. If you can't pay off the balance, the credit card interest will outweigh the increase in the gold's value.

Overlimit and Additional Fees

When purchasing gold using a credit card, don't just look at the nominal price; you should also consider any hidden fees that may be charged. For example, some merchants charge an additional fee for credit card payments. This fee is called a merchant fee and can range from 2–5% of the total transaction.

For example, if you buy gold worth IDR 10 million, the merchant will charge an additional 3% fee. This is quite a large amount, especially if not considered from the outset. Therefore, it's crucial to check for additional fees during transactions.

Furthermore, one common risk is overlimit, which occurs when your total transaction exceeds your credit card limit. If you exceed the limit, the bank will usually charge an additional fee, and the transaction may be rejected.

Gold Price Fluctuations

Gold prices do tend to rise in the long term, but that doesn't mean they never fall. In the short term, gold prices can fluctuate quite sharply depending on global economic conditions, the rupiah exchange rate, and global geopolitical situations. So, if you buy gold when the price is high and then it suddenly drops, the potential loss could be even greater if you haven't paid the installments in full.

Imagine buying gold with a credit card, hoping the value will increase in a few months. But the opposite happens. Therefore, buying gold with a credit card should be done with careful consideration and not simply because you're tempted by promotions or discounts.

Lack of Discipline in Paying Bills

When deciding to buy gold with a credit card, you must have a clear payment plan and a commitment to paying it off on time. The problem is, if you pay late, you'll not only be charged a late fee but also additional interest. These accumulated costs can make installments that initially seemed light actually become a financial burden.

Furthermore, late payments will affect your credit report. A bad credit report will certainly make it difficult for you to take out loans in the future. If you're not confident in your ability to pay on time, it might be better to use other, safer payment options.