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Brace yourselves: The Thanksgiving-to-Valentine’s-Day #ringselfie parade is coming to Instagram. Are you planning to contribute by buying a sparkly engagement ring for the one you love?
You’re in good company, because the holiday season is a popular time to propose. And while we can’t teach you about the merits of colorless vs. near-colorless diamonds when you're figuring out how to buy an engagement ring, we can help you consider which credit card will make one of the most monumental purchases of your life that much sweeter.
Why even think about credit cards when you’re still debating whether to pop the question on a Jumbotron? Because it’s rare to spend this much money in such a short time (though it is good practice for the soul-crushing expense of wedding planning), and you’re going to need to strategize.
Show the love, spread out the payments
Dropping a whole paycheck at once on an engagement ring may not be possible for you. In that case, consider applying for a credit card with an introductory 0% APR period and charge the ring to that card. You’ll have a nice, long, interest-free window during which you can pay off your credit card balance in more manageable amounts.
The U.S. Bank Visa® Platinum Card offers 0% APR for 20 billing cycles on purchases and balance transfers, and then the ongoing APR of 13.99% - 23.99% Variable APR and a $0 annual fee. If you plan to spend, say, $3,000 on a ring, you can skip the budget-busting lump sum payment in favor of smaller monthly interest-free payments.
Thankfully, there are other options for lovebirds with good credit. These cards also offer long intro 0% APR periods, along with no annual fee:
Rewards card + engagement ring = dream honeymoon
If you've been saving up and can manage to pay off the ring in one payment — and if you also have good credit — this is your opportunity to score a big discount on your honeymoon by earning a sign-up bonus with a travel rewards credit card.
Consider, for example, the Chase Sapphire Reserve®, which offers the following sign-up bonus: Earn 50K bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards® . Cardholders also get a $300 annual travel credit and a $100 statement credit to cover the cost of Global Entry or TSA Precheck application. However, as with marriage, this card isn’t for the commitment-phobic, on account of its $550 annual fee.
If you're not interested in paying such a large annual fee, take a look at the Chase Sapphire Preferred® Card. It also has a rich sign-up bonus: Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®. The annual fee is $95.
Another option might be the Capital One® Venture® Rewards Credit Card, which phrases its sign-up bonus this way: Enjoy a one-time bonus of 50,000 miles once you spend $3,000 on purchases within 3 months from account opening, equal to $500 in travel. There's also a $100 statement credit for Global Entry or TSA Precheck application and an annual fee of $95.
And if you're absolutely opposed to any kind of annual fee, you still have options.
Keep in mind, however, that rewards credit cards don’t always have lengthy 0% intro APR periods. So while they can earn you valuable travel rewards on your purchases, they may not be ideal for financing a ring or a honeymoon and paying it off over time. You likely won't want to carry a balance on these kinds of cards.
The perfect marriage of rewards, 0% intro interest period
That said, some credit cards do harmoniously blend together a long 0% introductory APR with rewards.
With the Chase Freedom®, you'll get an intro 0% APR for 15 months on purchases and balance transfers, and then the ongoing APR of 16.49% - 25.24% Variable APR. But the card also earns 5% cash back on up to $1,500 in combined quarterly spending in bonus categories that change each quarter (you must opt in to the categories each quarter). All other spending earns 1% back. For the fourth quarter of 2018, bonus categories include department stores, wholesale clubs and purchases made with Chase Pay.
Plus, there's a nice sign-up bonus: Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening. The annual fee is $0.
A modest proposal: Let's say you bought a $3,000 ring at Costco or at a department store with the Chase Freedom® and were a brand-new cardholder. You’d earn $75 in rewards on the first $1,500, $15 in rewards on the next $1,500, and the sign-up bonus — that’s $240 in rewards.
If you also happen to have the Chase Sapphire Reserve® or Chase Sapphire Preferred® Card, you could transfer those Chase Ultimate Rewards® points to one of those cards and earn a higher value per point when redeemed for travel.
Another example: The Discover it® Cash Back card also offers an intro 0% intro APR for 14 months on purchases and balance transfers, and then the ongoing APR of 11.99% - 22.99% Variable APR. It, too, nets you 5% cash back on up to $1,500 in combined quarterly spending in rotating bonus categories every quarter, when you activate those categories (1% back on everything else). For the fourth quarter of 2018, those categories include Amazon and wholesale club purchases.
The card offers a unique sign-up bonus for new cardholders in their first year, which Discover phrases this way: INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match. The annual fee is $0.
A modest proposal: If you bought a $3,000 ring on Amazon as a new cardholder, you’d earn $75 cash back on the first $1,500 and $15 on the next $1,500. Plus, your cash back would be doubled after the first year, meaning a total rewards return of $180 — and that's assuming you put no other purchases on the card.
With the Bank of America® Cash Rewards credit card, you'll get an intro 0% APR for 15 billing cycles on purchases and balance transfers, and then the ongoing APR of 15.49% - 25.49% Variable APR. The card earns 3% cash back in your choice category and 2% at grocery stores and wholesale clubs (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases), and unlimited 1% on all other purchases.
It offers $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening, with an annual fee of $0.
A modest proposal: Your $3,000 Costco ring purchase as a new cardholder could net you $50 on the first $2,500 spent, $5 on the remaining $500, plus the sign-up bonus. That equals $255 in cash back.
Plus, Bank of America® checking or savings customers get a 10% bonus on redemption (boosting your earning rates to 3.3%, 2.2% and 1.1%). And if you have at least $20,000 in combined accounts at Bank of America® and Merrill, you can earn bonuses of 25% to 75%.
So happy together
You have a lot on your mind as you’re preparing to get engaged. But before you buy a ring, apply for the credit card that will let you maximize this major expense.
Also, don’t forget to protect your investment! Add the ring to your renters or homeowners insurance policy before you propose.