Should You Use Your Credit Card to Buy Gold or Silver?

Gold and silver prices have been on the increase for many months and this is no surprise to Gerald Celente, the CEO of Trends Research Institute, business consultant and publisher of the Trends Journal.

This “Trends Expert” stated that gold and silver prices would continuously increase almost two years ago.  As CNN Headline News stated, “When CNN wants to know about the Top Trends, we ask Gerald Celente.”  As per usual, Gerald Celente called it right.

Many financial experts are stating that gold and silver demands will continue to be high for quite some time to come.  According to the vice president of the RBC Capital Markets Global Futures George Gero, he stated at Forbes.com that worries about the US debt and tensions in the Middle East are a couple of reasons why investors like to turn to gold.

As of the posting of this blog, gold was $1548 per ounce and silver was $36.21 per ounce.  Compare that to one year ago, gold was about $1200 per ounce and silver was $18.50 per ounce.

So investing in gold and silver is still proving to be profitable.

Do you want to invest in gold or silver but do not have the cash flow you need to purchase what you want? Are those credit cards getting more and more tempting to use for this investment?  Should you use your credit card to buy gold or silver?

Let’s look at the pros and cons of using a credit card to buy gold or silver.

Pros

Gold and Silver CoinsInvestments can be made using a credit card directly or using your card to obtain a cash advance and if your card provides customer benefits such as airline miles, or other travel rewards then this can be to your advantage so long as you have the cash to cover what you invest.

If you have very little or no credit card debt then expanding your portfolio can be profitable however, it is crucial to remember that purchasing gold and silver is speculative.

The total amount you borrow on your card should be an amount you can circumvent with ease and get out of should gold and silver prices drop.

Cons

Bottom line, anything can happen and the price of these metals can drop at any given time.  If you do not watch the markets on a daily basis and have very little or no knowledge about investing, then this is something to avoid.

Temptation to invest is huge but if your cash flow just isn’t there right now and you have no means in the foreseeable future to cover the cost of investing, then this too is something to avoid.

Now for the credit cards; they are tempting indeed.

Again, if you have a low to no cash flow then you really should speak to a financial advisor to make sure the move you make is a smart one (odds are the answer is no).


You may end spending a whole lot more money on paying interest than what a possible investment may be worth. An investment can be risky business.

Once you have weighed all the pros and cons and have sought the advice of a financial expert and want to make that step, then be sure your credit card offers you benefits.

If you have cash that you can apply to a credit card purchase of gold and silver then you may come out even further ahead than you originally thought.  Just remember, if you aren’t debt free on your credit card then you risk losing on your investment AND you may be paying interest on your purchase.

One thing is certain though, it is risky and every option must be weighed first before taking that plunge.

Would you buy gold or silver now?  Would you use your credit card for the purchase?

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Published or updated July 30, 2013.

Comments

  1. An interesting thought to be sure. I guess one would have to assess the future value of a dollar versus the value of gold or silver. If you didn’t have the cash, but could afford $100 per month in payments, then you might be able to carry a $5000 balance. Saving that much at $100 per month would take just over 4 years. But what will the price of gold and silver be then. Will you be paying off an appreciating asset with depreciating dollars? That is the decision you will have to make.

  2. I did not purchase my gold/silver with a credit card — but I don’t know if I would if I had no other option either. If you are in debt I definitely do not know if that is a wise decision. I think any additional money should be put toward either an emergency fund or paying down your debt — THEN worrying about purchasing gold/silver.

  3. If you are in debt, it’s probably not a good idea to buy gold and/or silver with a credit card, only with cash, if worse comes to worst: you might be bankrupt, but you will still have your gold.

    I don’t think it’s a bad idea to own at least some gold even if in debt, as ultimate insurance.

    • I think, for the most part, if you are carrying credit card debt then your best return is probably paying that off first (assuming you aren’t on a 0%APR trial rate).

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