Engagement Ring Financing: Cost Comparison & Tips

When you consider the fact that the average engagement ring costs $4,000 and the average household already owes more than $7,000 to credit card companies, it’s clear why many proposers opt to finance this significant expense.

Numerous financing options do indeed exist for engagement ring shoppers – from jewelry store credit plans to 0% credit cards and other loans. And this guide will help you thoroughly evaluate these various means in order to help you arrive at the most affordable end possible. We’ll compare the financing costs of credit cards for people with varying levels of credit to the financing plans available directly from the country’s largest jewelry store chains. We’ll also explore financing alternatives, offer money-saving ring-buying tips and consult a panel of leading wedding and personal finance experts about whether a wedding ring is worth debt.

You should also make sure to check out our guide on How Much To Spend On An Engagement Ring. You’ll find that rules of thumb about your monthly salary won’t get you anywhere but into financial trouble.

Engagement Ring Financing Options

Below, we’ve broken down the best 0% credit card offers for people with above-average, fair and bad credit, respectively, as well as the many financing offers available directly from jewelry stores.  The Required Monthly Payment that is listed for each option is what is necessary to be debt free within the allotted time provided under a retailer’s plan or a credit card’s 0% introductory term.

You can use a credit card calculator to see how different monthly payments would affect the finance charges you will potentially incur.

12 Month Financing Options - $1,500 Ring

36-Month Financing Options:  $3,000 Ring

*All non-introductory interest rates listed above are variable rates subject to change based on the economic climate. Information was collected on Jun 18, 2015 and may no longer be accurate.

Financing Alternatives

Your spouse might not like to hear this, but financing your ring purchase may not be your only option.  We’ll introduce you to the other fish in the sea below.

• Pay In Full: You’ll likely have to downgrade your price range significantly, but at least you’ll avoid paying interest or, worse, missing a payment and incurring credit score damage.  Besides, you – and not a credit card issuer or jewelry company – will truly own your spouse’s finger. 

• Take Out A Loan: This isn’t any better that financing a ring purchase with a credit card or retailer plan from a debt perspective. But you may be able to get a better deal, depending on your credit standing and the market climate. 

• Use A Family Ring: You’ve probably considered this option already, but in case you haven’t, it’s definitely worth bringing up. If you can give new life to an heirloom you’ll be doing a similar favor for your wallet. 

• Borrow From Friends & Family: Have you considered a romantic crowdfunding campaign to fund your ring purchase? It could work, but keeping things a secret would be tough. What about asking your parents for some assistance? They could consider it a wedding present. Or you could simply ask wedding guests to give cash as a gift so you can be sure to pay off the ring purchase in full within a credit card’s 0% term.

Tips For Saving On Engagement Ring Financing

Getting a good deal on an engagement ring is one thing. Getting a good deal on financing for it is another.  Just like with any financial transaction, there are a number of ways to defray costs and maximize value.

• Identify An Affordable Monthly Payment: You should do this before looking into financing offers and buying a ring. Take stock of your financial situation, including whether or not you have any debt and the status of your emergency fund.  Then track your expenses for at least a month in order to figure out how much you currently spend.Finally, make a budget that includes your ring payment.  This will give you a sense not only of what you can afford, but also what you might be able to scrimp on in order to make it a bit more affordable. We recommend making the adjustments necessary to pay in full upfront, if possible, or at least to be debt-free within the term of a low-cost financing plan. That means you should not be going into debt for any expenses other than the engagement ring purchase.

• Compare All Costs: Don’t just look at the interest rate. Don’t hone in on fees. And don’t get mesmerized by the term of the financing arrangement. You need to consider all of them together in order to determine the required monthly payments and the total interest you would pay.  Those are the data points by which you should compare financing offers. 

• Watch Out For Deferred Interest: While traditional 0% credit cards simply charge interest to whatever balance remains when the introductory term ends and the regular APR kicks in, many retailer-affiliated financing plans employ a policy known as deferred interest, whereby if you do not pay your balance in full within the allotted time, finance charges will apply retroactively to the entire original purchase amount.Overlooking this can be a very costly mistake, so make sure to be on the lookout for words like “if paid in full” and always ask the financing provider about the use of deferred interest before ever signing anything. 
• Use A Credit Card Calculator:  A credit card calculator will help you determine how your overall costs will change based on different financing offers, monthly payments and payment timeframes. It will also provide recommendations for which credit cards will save you the most money in each scenario.

Ask the Experts

 

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