An engagement ring is a major purchase - here's the best way to pay for it

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An engagement ring is a major purchase - here's the best way to pay for it
engagement ring

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An engagement ring is an exciting purchase, but make sure you strategize how you'll pay for it.

  • Buying an engagement ring is exciting, but it takes a lot of research. Paying for the ring is something you'll need to consider, too.
  • There are a few different ways to pay for a ring, including saving and paying outright or taking out a loan.
  • One of the easiest ways to pay without depleting your cash reserves - and without having to pay interest or loan fees - is to use a credit card with a 0% introductory APR on purchases. That way, you can take your time to pay without having to pay interest (until the introductory period is over).
  • There are a few options, but our choice for the best card with a 0% introductory APR is the Chase Freedom Unlimited. After the 15-month 0% introductory period, a variable 16.49% - 25.24% APR applies.
  • See Business Insider's list of the best rewards credit cards »

Buying an engagement ring is a big deal. It's a thing that takes research, patience, and decisiveness. As Josh Marion, a vice president at Ritani, an online diamond and jewelry retailer pointed out in an interview with Business Insider, buying an engagement ring "is a decision on par with buying a car or a house - you can't just jump into it."

Of course, whenever you start thinking about an engagement ring, it's not long before the cost comes into play. Whenever you decide you're ready to propose to that special someone, how much you spend on the ring, whether you're resetting a diamond that has been in your family for generations or buying a new one, is a personal decision. There's a ton of advice out there, and plenty of schools of thought, but there are no hard and fast rules; ignore anyone who tells you that you absolutely have to spend three months' salary, or that you have to spend a certain amount for each year you've been together.

One thing that's for sure, though, is that you shouldn't spend outside of your means. When you're ready to pop the question, and in a financial position to do so, there are a few ways to pay for an engagement ring.

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Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back.

Your payment options

However much you decide to spend, chances are it'll be a lot - likely the most expensive thing you've ever bought. When I proposed to my (now) wife, that was certainly the case - not counting college and grad school, of course.

The first, and most obvious, is to save up enough money and buy it outright. However, there are reasons you may not want to do this. For instance, you may want to keep a cash cushion in case of emergency, rather than committing to spending it all at once. After all, that's why people finance things like new appliances or cars.

The next option is to finance the ring with a loan arranged through your jeweler. Using loans to make major purchases and keep cash on hand can be a smart financial move, and in some cases, the loans offered by your jeweler may fit your needs. However, other times they may not have the best terms or interest rates, and you generally won't get any cash back or rewards on the purchase.

Fortunately, there's a third option, which is what I went with. Instead of taking out a traditional loan, or financing a ring through a credit card offered by the jeweler, you can open a new credit card that has a 0% introductory APR on purchases for a certain amount of time.

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Crystal Cox/Business Insider

The Chase Freedom Unlimited is a great option if you want a card with an intro APR offer on purchases.

Why I used a credit card with an intro APR offer

When I bought the ring, I opened a card that had a 0% introductory APR for the first 15 months. That meant that instead of paying cash all at once, I was able to charge the ring to the card, and pay it off over a bit more than a year without having to pay any interest. As a nice cherry on top, I even got a sign-up bonus for opening the card, and cash back on the ring itself, which I was able to put right toward paying it off.

It was basically free money for buying the ring.

The key is that you make sure you pay off the whole thing before the introductory APR ends and the normal one becomes effective. In my case, I decided to be safe and divided the total cost of the engagement ring by 14. I paid that amount each month, and that way, I was finished paying off the whole thing a month early.

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A great feature is that you have extra flexibility if you go this route. If you come into some extra cash, or decide that you want to just finish the payments from savings, you can pay off the balance in full at any time.

The best credit cards with 0% APR offers

While there are a few different cards that offer introductory APRs, the one I would pick now is the Freedom Unlimited card from Chase.

That's because in addition to offering a long 15-month term on the 0% introductory purchase and balance transfer APR (which goes up to a normal 16.49% - 25.24% variable APR afterward), it offers 1.5% cash back on every dollar spent, and a sign-up bonus of $150 after you spend at least $500 in the first three months of opening the card.

Put another way, if you were using the card to finance a $3,000 purchase, you'd get $195 total cash back.

Plus, if you have a premium card from Chase, like the Chase Sapphire Preferred Card, Chase Sapphire Reserve, or Ink Business Preferred Credit Card, you can turn your Freedom Unlimited's cash back into Chase Ultimate Rewards points instead, and move those points to the premium Chase card. That way, you can do things like transfer Chase points to frequent flyer partners, which is usually a much more lucrative way to use them than redeeming as cash back.

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Here are some other cards with intro APR periods for purchases:

Bottom line

Regardless of which route you choose to go toward paying for the ring, this is an exciting time, but you have a lot of research to do. If you're not sure where to start, Ritani offers a number of guides on picking out diamonds and settings, as well as how to go about actually buying the ring. And check out Insider Picks' guide to the best places to buy engagement rings online.

Click here to learn more about the Chase Freedom Unlimited card »

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

Business Insider may receive a commission from The Points Guy Affiliate Network, but our reporting and recommendations are always independent and objective.

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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