How to Get a Gold-Backed Debit Card

When was the last time your boss crossed your palm with silver, or you paid for your groceries with the last few gold doublets in your pocket?

It’s been a while, hasn’t it? That’s the problem with gold and silver: They were money long before money existed, so they’re a safe and stable investment, but their practical uses are limited. 

So, how can you have the best of both worlds – the convenience of a debit card coupled with the security of gold or silver?

At Nomad Capitalist, asset protection is a core element of our services for entrepreneurs and investors. We can help you solve any gold and silver issues you might have, so why not get started by contacting us today?

Diversifying Beyond Fiat Currency

Considering the cascade of economic and geopolitical shocks in recent years, it should come as no surprise that investors have renewed interest in diversifying their assets beyond fiat currency.

What’s a fiat currency? Fiat currency is a type of money issued by a government. It has value because the government maintains it, and people trust its value. Think US Dollar or Euro. Unlike commodity money, a fiat currency has no intrinsic value and is not backed by physical assets like gold or silver.

So, diversification is always a good idea to cover any potential financial downside and live comfortably even if an asset class falls through. If you’re looking to diversify beyond fiat currency, you generally have two options – cryptocurrency and precious metals.

Cryptocurrency continues to prove particularly popular with investors. Despite its volatility, the lesson of crypto should be clear by now – it’s resilient enough to quieten the nay-sayers. That said, it’s definitely not the basket you want to be putting all your eggs into. However, it does rather prove the point of why asset diversification is critical to maintaining your financial health.

Unlike cryptocurrency, which is becoming a more common payment method, options for making purchases with gold bullion or silver coins are somewhat limited. In light of this lack of liquidity, financial institutions have created gold-backed debit cards that allow users to easily and directly convert precious metals to usable fiat currency.

Gold-backed debit cards aren’t a necessity for most investors, but if you’d like to make your precious metal assets more liquid, they can be a very useful tool.

Additionally, anyone who is new to investing in precious metals should check out our tips for buying gold to help you get started. So, in light of a lack of liquidity, financial institutions have created gold-backed debit cards that allow users to easily and directly convert precious metals to usable fiat currency.

How Does a Gold-Backed Debit Card Work?

For the most part, gold-backed debit cards work just like normal debit cards. When you use a debit card, your bank logs the transaction and pulls the money from your account balance. With a gold-backed card, this takes a few more steps but the general process is the same.

When you run your gold-backed debit card at the store, your bank will convert the purchase from fiat currency to its value in gold or silver and then withdraw that money from your precious metals storage account.

However, while making purchases with a gold-backed debit card is simple and intuitive, setting up your precious metals storage account takes a few extra steps. First, you must set up your account and buy gold and silver. Some banks and companies require a minimum deposit, which can range from US$100 to US$500.

Due to the logistics involved in transporting silver or gold bullion, most banks that offer gold-backed debit cards require you to purchase your precious metals in-house.

Then, when you make your deposit, the bank will set aside your purchase in a secured vault. Most institutions that issue gold-backed debit cards store their gold in Switzerland.

Finally, once those steps are completed, you’ll be issued a debit card linked to your precious metals storage account, which you can then use as a regular debit card.

A gold-backed debit card can be a great way to increase the liquidity of your precious metal assets.

Where Can You Get a Gold-Backed Debit Card?

As investors seek ways to make their gold and silver assets more liquid, a handful of banks and companies have created streamlined services where users can set up a bank account, purchase gold and silver and then receive a debit card linked to their precious metal assets.

Glint and VeraCash offer their clients gold and silver banking and debit card services. If you’re a US citizen or permanent resident, keep in mind that these options may not be open to you due to US banking laws.

Glint

If you want to manage your gold-backed debit card from a user-friendly app, Glint may be the right choice for you.

Glint is a UK-based company that makes buying gold easier for new investors. Users can make purchases and fund their gold debit card through the app, which only charges a nominal 0.5% fee on all gold purchases and fiat currency exchanges.

There’s no minimum investment required to open an account, making it an ideal option for investors looking to dabble before fully committing. Glint accepts Sterling, US Dollars and Euros, with wallets that can also be used for peer-to-peer redemption.

OneGold

The OneGold bullion card is a new precious metals rewards credit card. The points generated using the bullion card for everyday purchases are then redeemed in your OneGold investment account. You can then use the points generated to invest in assets like gold, platinum and silver. While it may be a credit card, there are a number of benefits associated, like some travel accident cover, lost luggage reimbursement and roadside assistance. 

Conditions include a stipulation that users must make US$1,500 in net purchases within 90 days to receive 15,000 bonus points. There are contactless options with integrations with Apple Pay, Samsung Pay and Fitbit. There’s no annual fee or introductory APR for 12 months, but after that, the APR jumps to between 19.49% and 29.49%, based on creditworthiness. Still, it’s a novel way to access vaulted metals at a relatively low cost. 

Wahed 

This US-based FinTech has launched a gold-backed debit card aimed at the Muslim community. The card allows users to make purchases using assets stored in an exchange-traded gold commodity. Many Muslims prefer to hold cash rather than open bank accounts, which reduces its longer-term value. 

Wahed prioritises a stable deposit-based product that reflects the current value of gold rather than promising larger returns or interest payments. It’s a Shariah-compliant card that’s consistent with the Islamic faith.

VeraCash

VeraCash is also quite user-friendly. You can manage your account through a streamlined app, and you can make purchases with a Mastercard-linked debit card. It also uses a unique system to manage its gold-backed debit card.

When you first make a deposit, your fiat currency will automatically be converted into grams of precious metals. However, your balance is expressed in VeraCash units equivalent to the Euro.

VeraCash doesn’t charge much in transaction fees and doesn’t require a minimum balance, but its purchase management fees are fairly steep. The company takes a 3% commission on all gold purchases, 7% on silver and 10% on diamonds. There are also plenty of miscellaneous fees, including card re-issuing fees.

VeraCash is an interesting option for people in the Eurozone looking to begin investing in precious metals. Just keep in mind that its fees can be a turn-off for anyone looking to make large purchases.

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Should You Get a Gold-backed Debit Card?

A debit card linked to precious metals certainly solves problems with gold and silver’s lack of liquidity, but the question of whether or not you should get one depends on whether you’ll actually use it.

If you’re new to investing in precious metals, then these gold-backed debit cards are a great way to get started. They streamline the process of creating a precious metals storage account, which can benefit new investors who may not want to commit thousands of dollars at first.

On the other hand, this streamlined process can be a turn-off to more experienced investors who already have large stores of gold bullion. Plus, US citizens and permanent residents may not be eligible for many gold-backed debit cards due to US banking laws. 

Although some gold debit card services allow you to use your own gold bullion and silver coins to fund the card, the logistics of doing so can be somewhat difficult. Additionally, whether or not you would actually use a gold debit card depends on your investment plan. Many investors also like to leave their gold and silver relatively untouched, so a gold-backed debit card would defeat that purpose.

However, there are plenty of good reasons to get a gold-backed debit card. It can be useful if you need to liquefy some of your precious metal assets. And it’s an attractive tool for anyone interested in investing in precious metals.

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At Nomad Capitalist, we create holistic strategies for high-net-worth individuals to protect all their assets, including high-yielding investment options. We advise on the best jurisdictions for your investments, combined with a tax, immigration and asset protection strategy designed specifically for your needs. Become a client today.