Can Gold Jewellery be Purchased with a Credit Card?
Last Updated : May 29, 2020, 12:25 p.m.
People in India highly believe in having gold jewellery as they use it extensively for purposes like marriage as well as to deal with financial emergencies. Apart from that, Gold jewellery also acts as a status symbol in our Indian society. An individual possessing a high quantity of gold has high respect among his or her peers. That’s why there are so many individuals in our country who prefer to buy gold with their hard-earned money because of the social and monetary value this asset can bring to you.
But there are some people in our country who do not have enough funds to buy the jewellery by paying the total amount in one installment. If you are someone who wants to buy jewellery but finding yourself short of funds then we will be telling you about one method by which you can buy the jewellery and pay for the same in easy monthly installments. There is this question that a lot of individuals ask if they can buy Gold Jewellery with their credit card? The answer to this question is Yes. This is the method you want to opt for if you do not have enough funds to buy the gold you want. In this article, we will be telling you everything about this, keep reading!
What is the Process to Purchase Gold Jewellery with a Credit Card?
In current times, there are several methods to buy Gold jewellery. Gone are those days when you can buy the jewellery only by going to offline stores. Nowadays, you can buy any kind of gold ornaments you like on several online platforms. Some of these platforms are Tanishq, PC Jewellers, Kalyan Jewelers, Blue Stone, Malabar Jewellers, etc. To buy the jewellery on these platforms, you just need to visit the websites of these top jewellers and buy your favorite ones. After that, the purchased jewellery will be delivered to your home. You will always have the option to visit the store and buy ornaments you like if you don’t want to buy online.
On these online platforms, there are several payment options that you can avail of, such as Debit Cards, Net Banking, etc. Credit Card can be the most suitable payment option for those who don’t have enough funds with them currently but can pay the amount later. The most amazing thing that you can do with a credit card is that you have the freedom to buy any item and pay the amount in easy installments over a fixed period chosen by you.
However, there is one thing that you need to remember that this item must be within your credit limit. When you get a credit card from the bank, the lender fixes a certain credit limit for you. The available credit limit is the remaining limit after you utilize some amount from your overall credit limit. Suppose that your overall credit limit is INR 1 lakh and you use INR 20,000 for some mobile purchase, the available credit limit will be INR 80,000. So, you can buy jewellery costing upto INR 80,000.
Lenders charge a certain interest on the amount you use if you opt for the EMI payment method. The interest rates usually range from 13% to 18% per annum when you choose to pay the amount via EMI whereas, it tends to range from 30% to 40% per annum when you choose to revolve the credit without EMI. Revolving credit occurs when you do not pay the total due amount on or before the due date and instead, pay the partial amount which could be minimum due or more than that but below the total due. This amount keeps getting bigger and bigger if you continue revolving the credit.
You will need to pay a certain processing fee to avail of the easy EMI facility. After making the transaction with your credit card, you will need to make sure that you convert this transaction into easy installments of your choice. This can be of 6, 9, 12 months or even more according to your repayment capacity and convenience. For some credit cards, the transaction will be automatically converted into easy installments. You can also do this via Net Banking or by calling to the customer care of your respective lender.
If you are swiping your credit card at any of the offline jewellery stores, you will need to follow the same process for converting your transaction into EMIs.
How much EMI Amount you will have to Pay on Purchasing Jewellery with Credit Card?
After knowing these details about the jewellery purchase with a credit card, you must want to know how much EMI amount you will have to pay every month. Let’s be told that your EMI amount will depend upon several factors such as rate of interest on your credit card, tenure, etc. If you choose a shorter tenure, your EMI amount will be higher and vice versa. Higher interest rates will also make you pay a higher EMI amount.
Let’s understand this through an example. Suppose you want to buy gold ornaments worth INR 70,000 from the online platforms or offline stores. After paying the full amount with your credit card, you will need to convert this transaction into easy installments for 9 months. The interest rate on your credit card for EMI transactions is fixed at 14% per annum. Now, what will be the EMI amount that you need to pay for this transaction? Check out the table below to know the answer.
| Credit Card Aspects | Details |
|---|---|
| Required Loan Amount | INR 70,000 |
| Rate of Interest | 14% per annum |
| Tenure | 9 months |
| EMI amount | INR 8,239 |
| Interest Outgo on your Loan Amount | INR 4,146 |
| GST @18% on the Interest Amount | INR 746.46 |
| Total Amount Payable without GST charges | INR 74,146 |
| Total Amount including GST charges | INR 74,892.46 |
So, you will be paying EMI worth INR 8,239 per month for 9 months. The total interest you will be paying during this period will be INR 4,146 at the interest rate of 14% per annum.
| Installment Number | EMI Amount (in INR) | Principal Amount (in INR) | Interest Amount (in INR) | GST @18%(In INR) | Balance Amount (in INR) |
|---|---|---|---|---|---|
| 1 | 8,239 | 7,421 | 817 | 147.06 | 62,578 |
| 2 | 8,239 | 7,508 | 730 | 131.4 | 55,070 |
| 3 | 8,239 | 7,596 | 642 | 115.56 | 47,474 |
| 4 | 8,239 | 7,684 | 554 | 99.72 | 39,789 |
| 5 | 8,239 | 7,774 | 464 | 83.52 | 32,015 |
| 6 | 8,239 | 7,864 | 374 | 67.32 | 24,150 |
| 7 | 8,239 | 7,956 | 282 | 50.76 | 19,163 |
| 8 | 8,239 | 8,049 | 189 | 34.02 | 8,143 |
| 9 | 8,239 | 8,143 | 95 | 17.1 | 0 |
Now, from the above table, you can have an idea about the EMI amount, principal amount, interest amount, and the balance amount at the end of each month of your tenure. So, you can see how easily you can buy gold jewellery with your credit card.
How to Use a Credit card EMI Calculator?
As we told you in the above-mentioned example, you can know the EMI amount that you have to pay for your transaction. But what if you want to know the EMI amount for any other amount? Well, in that case, you can use the Credit Card EMI Calculator to have an estimate about your monthly installments.
This tool helps you in organizing your finances in a better way as you will have the proper estimation of the EMI amount. So, if you want to know what will be the EMI amount for your credit card transaction, you can use the Credit Card EMI Calculator to figure out the same.
Like any other calculator, you will need to put in a few inputs to get the EMI amount as the output. These details are Transaction Amount, Tenure, and Rate of Interest charged by your lender. As soon as you fill all these details into the Credit card EMI Calculator, the tool will give you the result instantly. Apart from the EMI amount, you will also get to see the total interest amount and the total amount payable during the tenure.
The most amazing thing about this tool is that you can put the values in the tool as many times as you want if you are not satisfied with the output. Because of the endlessly flexible nature of this tool, you can use it until you do not get the desired results according to your repayment capacity. So, it is advisable to use the Credit Card EMI Calculator before making any big-ticket purchase with your card. Because if you miss paying the EMI amount then your credit score can get affected negatively.