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8 Exciting Benefits of Gold Backed Credit Cards

April 21, 2023

Table of Contents

    Table of Contents

      A Gold backed credit card is a great option to use your tied up capital and make it work for you. Liquify your Gold and borrow against it smartly through these cards.

      While we are talking about financial portfolio, there is a component that is definitely a must have! Gold! Gold is superior when it comes to diversifying your financial portfolio. You can opt for digital Gold investment options, take a Gold loan or even consider the very fresh way: Gold backed credit card.

      What exactly is a Gold credit card?

      There are several types of Gold credit cards. Some are carved straight of pure Gold itself, while some are issued against the Gold that you already own to borrow against  it. Here, we’ll be reflecting on the latter sense of a Gold credit card. 

      In simple words, a Gold credit card is a type of credit card which you use to borrow a sum against the real Gold, in the form of jewelry or bullions, etc., that you have. You might be considering opting for a Gold credit card because you have an ample amount of Gold with you and liquidating it will cost you quite high. Or else, you are good at forecasting that Gold is here to stay in the longer run and a financial security mechanism.

      Be it bullions, coins or simply your Gold jewelry, you know that you can conveniently make your tied up capital work for you. 

      Also read : Why Savings Accounts Are Making You Poorer

      Can I get a Gold credit card if I don’t actually own Gold? 

      Yes! You can get a Gold credit card even if you don’t actually own Gold. The financial intermediary company which will be assigning you the card would be willing to let you purchase the Gold that you are borrowing against. Therefore, even without already owning Gold, you can easily apply to get one. 

      When deciding whether to invest in Gold bullions or coins, you must consider price fluctuations in the Gold market and see if the returns are higher or are the prices bound to steeply fall in the coming days. If the latter is the case, you have no reason to waste time investing in bullions since you won’t reap any high profits or credits. However, if the conditions are favorable, just as a good financial adviser would suggest you even regarding a normal credit card, you should opt for a Gold credit card. There is no particular  harm or loss associated with Gold backed cards. But always consider pondering upon market conditions before taking any step. 

      Remember, when you will get your Gold backed card, you will have to give your Gold to the issuing authority to be kept in a safe vault with themselves. In a broader sense, you might never physically own your Gold ever again. Some companies might let you take it for a specific time period but eventually it’s them who is the real owner now. If this fact makes you skeptical regarding converting your Gold into Gold backed credit cards, you can simply avoid doing so. 

      Just like a normal credit card, Gold backed credit cards too charge an additional fee in case of late payments of dues. The best that you can do while owing your Gold backed card is to pay the charges or dues on time and never let the debt accumulate. It will have a twin fold benefit for you. Firstly, you will refrain from high charges and penalties and secondly, you will build a good  credit score which is a great measure for taking loans in the future.

      Does owning a Gold backed credit card matter? 

      Different companies that offer Gold credit cards give different range of benefits. Therefore, it is easier for you to compare the schemes of one company/banks with the other and choose the best for you. 

      If you feel yourself owing excessive Gold, it is a good option for you to make use of it in making good investments or liquidating it through a Gold backed credit card. Whereas, on the other hand, if you feel uneasy with the fact that your Gold will be with a complete stranger entity and may never get back to you, you can totally skip it. Some financially stable people do consider taking a Gold backed card or a card made out of 14 carat Gold itself, it does not reflect any higher status symbol. 

      Benefits of owning a Gold credit card in India

      1. Higher credit limits than normal credit cards

      Gold credit cards generally have a higher credit limit than any normal credit card. The reason behind this is the strong and reliable back that your Gold creates for your card. While normal credit cards do have a higher risk, Gold credit cards are a better option in this regard. 

      2. Gold credit cards are accepted globally

      If you are refraining from buying a Gold backed credit card just because you are skeptical if they are accepted globally or not, well, cheers to you! You never have to worry about this because everywhere you go, your Gold card can always accompany you. Also, a large number of Indian merchants use Gold credit cards and so you’ll never be using it alone. 

      3. Alluring provisions like interest-free credit 

      Some intermediary financial companies and banks provide you the facility of interest free credit for some days. Usually this time period is for 45 days. This time period is also a good opportunity to test your card and see if that's all you wanted. 

      4. Low financial charges

      Gold backed credit cards are still a fresh concept in India. Due to its growing popularity, new companies are coming up with exciting incentives to attract buyers. It is the perfect time for you to explore through different credit cards and compare their individual financial charges. The lower the charge, the more economical they are for you! 

      5. Facility of add-on cards

      Some companies are even providing facilities to apply for supplementary cards for the family too! Generally it has an additional 4 members. The first add-on even gets an insurance cover while for others, the fee is  quite low and a single time payment. Doesn’t  this make Gold backed cards even more attractive?

      6. No subscription fee and annual fee

      With careful comparison of different companies’ schemes relating to Gold backed credit cards, you can even avail great  benefits like no subscription fee and even no annual fee! The add on cards too don’t have any annual payments. In order to become a cardholder, you do not have to pay any additional fee, while you may have to pay a very credible sum for add on cards. 

      7. Purchase protection

      In case you are stuck in a situation like a fraudulent card, damaged card or say a duplicate card, you can contact your company/bank and report it with them. In almost all cases, this will not be charged on your card if you report and hence you can avail your claim  fully with no additional cost.  

      8. Extra benefits like rewards and cashback

      With Gold credit cards, you can even avail claims like extra cashbacks and several amazing financial rewards!

      Gold credit cards are an exciting way to make your Gold work for you. They are easy to avail and are very smooth in  transactions. You can use them like you normal credit cards with no hesitance. They are even more secure than your normal credit cards. 

      So, claim your Gold backed card today!

      Do check out this beginner's guide to using a credit card wisely in India.

      Looking for more options to invest in Gold? There are several ways today through which you can invest your Gold or money to reap higher benefits apart from just a Gold backed card. You can invest in Digital Gold and get your 24 carat Gold delivered at your doorstep. Several online investment tools like Jar, give such amazing options. You can even convert your spare change into Gold through smart small investment plans.