Whether buying in-person from a local coin shop, or from an online precious metal dealer, most investors automatically take out their credit card when it’s time for payment. Most dealers do accept Visa and MasterCard payments; many also accept Discover or American Express cards. However, it may not be in your best interest to pay for gold coins with a credit card.
Processing Fees
Many precious metal dealers charge an additional fee for credit card orders. This fee may be as much as 5% of the total purchase price, either expressed as an added fee for credit card purchases or as a discount for other forms of purchase such as bank wire or paper checks.
This fee is added to cover the amount the seller must pay to process the credit card transaction. When buying high-dollar items such as precious metals, this fee can add a lot to your bottom line, so be sure you take it into account when computing the total purchase price.
Processing Speed
One of the benefits of paying with a credit card is the fast transaction processing time. These are typically among the fastest transactions. Credit cards may be accepted in person, over the phone, or online, making them a versatile payment method.
As a buyer, paying with credit cards is one way to protect your investment. If the coins do not arrive, or are not as advertised, you can initiate a chargeback in order to get a refund from the dealer. However, this factor is also what makes credit cards riskier for dealers, who incur the risk of a chargeback when they accept credit cards as payment.
Anti-Fraud Requirements
If you do pay with a credit card, keep in mind that with high-dollar purchases, sellers are particularly vigilant about AVS match requirements. During the buying process, expect the seller to ask for your billing address or the CVV number (the 3-digit code on the back of the card). Many sellers will only ship to the credit card billing address in order to avoid fraud attempts and ensure that a stolen credit card is not being used.
Even with this process, many sellers are understably worried about chargebacks. Some have a maximum limit for credit card purchases; if you plan to spend more than $5,000-$10,000 at once, expect for the seller to require a bank wire instead of a credit card payment. Other dealers will subject large credit card orders to additional screening or require additional documentation to be sure that they are dealing with a legitimate buyer.
While some precious metal investors consider credit cards to be just another way to pay for their purchase, others plan to go into credit card debt in order to fund their gold coin purchases. Most dealers do not recommend going into debt to invest in gold, though some investors continue to speculate that the future value of their gold will offset the interest owed on the card. Given the additional fees associated with buying precious metals on a credit card, doing so doesn’t make financial sense for the majority of investors.