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Engagement Rings and Credit Cards: a Rewarding Match

The right card can give you a long interest-free runway to pay off that diamond, or rewards that can help fund a honeymoon.
Nov. 14, 2018
Cash Back Credit Cards, Credit Cards, Rewards Credit Cards
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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% on Purchases for 20 billing cycles and 0% on Balance Transfers for 20 months, and then the ongoing APR of 11.99% - 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 monthly interest-free payments of $150. However, you do need an excellent credit score to qualify. Another drawback is that this card currently accepts applicants in only certain U.S. states.

Thankfully, there are other options for lovebirds with good credit. These cards offer an intro 0% APR for a still-impressive 18 months, 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 $450 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 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®. The annual fee is $0 for the first year, then $95.

The Barclaycard Arrival Plus® World Elite Mastercard®, too, offers a generous sign-up bonus: Enjoy 60,000 bonus miles after spending $5,000 on purchases in the first 90 days. Since each mile is worth 1 cent when you redeem them for travel, you’d end up $600 closer to a lounge chair in Bora Bora. The annual fee is $89 (waived first year).

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. Amplify your earnings by booking hotel stays via hotels.com/venture to earn 10 miles per dollar spent. There’s also a $100 statement credit for Global Entry or TSA Precheck application and an annual fee of $0 for the first year, then $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.

» MORE: How credit cards can help you save on your wedding

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% on Purchases and Balance Transfers for 15 months, and then the ongoing APR of 16.99% - 25.74% 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% on Purchases and Balance Transfers for 14 months, and then the ongoing APR of 13.99% - 24.99% 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: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched. 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% on Purchases for 12 billing cycles and 0% on Balance Transfers for 12 billing cycles for balance transfers made in the first 60 days, and then the ongoing APR of 15.24% - 25.24% Variable APR. The card earns 2% cash back at grocery stores and wholesale clubs and 3% cash back on gas on up to $2,500 each quarter (all other purchases earn 1% cash back).

It offers $200 online cash rewards bonus after you spend at least $500 on 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®, Merrill Lynch or Merrill Edge, 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.

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