Four women sit outside in jackets. One woman holds her left hand out looking at her engagement ring as three friends embrace her and look happy.

How to Buy an Engagement Ring with a Credit Card

Published December 12, 2024

8 min read

Table of contents

Key Points About: Engagement Ring Financing

You should choose an engagement ring based on your current financial situation.
There are different financing options available if you want to purchase an engagement ring, including credit cards.
Not matter how you choose to buy your ring, you should always practice responsible money habits.

How much to spend on an engagement ring

There are several things to take into account when deciding how much to spend on an engagement ring.

Figure out your ring budget

It's important to set a budget that aligns with your financial situation. Look at your current savings, income, and other financial obligations and figure out how much you can reasonably spend on a ring.

Know your partner’s expectations

You should also consider your partner's expectations and preferences when choosing a ring. Some may value the symbolism and significance of a more expensive ring, while others may prioritize practicality and prefer a more budget-friendly option. Have open and honest conversations with your partner to understand their desires and make an informed decision together.

There’s no right or wrong amount to spend on an engagement ring. By setting a realistic budget, having open communication, and exploring different ways to finance the purchase, you can confidently make a decision that aligns with your financial goals and reflects the significance of the occasion.

How to finance an engagement ring

When it comes to financing an engagement ring, there are several options to consider, including personal loans, jewelry store financing, savings, and credit cards.

Personal loans

A personal loan can be a flexible financing option for an engagement ring. With a personal loan, you can borrow money from a bank or a lending institution to help finance your purchase. According to information from the Federal Reserve, personal loans can come with fixed or variable interest rates and typically have set repayment terms. When using a personal loan for purchasing an engagement ring, it is important to consider your credit score, as it may impact your interest rate and eligibility, according to the Consumer Financial Protection Bureau.

Jewelry store financing

Some jewelry stores may offer financing options to customers buying engagement rings. According to Consumer Reports, these financing options may include special promotions, such as low interest during a specific promotional period. It's essential to carefully review the terms and conditions of such financing options, including the interest rates, repayment periods, and any additional fees. Be sure to compare different jewelry stores and their financing options before deciding if it’s right for you.

Personal savings

Personal savings is a traditional and financially responsible payment option for buying an engagement ring. By setting aside a certain amount of money each month, you can accumulate the funds needed to make a purchase without incurring any debt. Though it may take longer to save up for an engagement ring, this option allows you to have complete control over your finances and avoid any interest charges or payment obligations.

Credit cards

Credit cards can offer convenience and flexibility when it comes to engagement ring financing. However, it's important to carefully consider the pros and cons of using a credit card to buy an engagement ring before making a decision.

Convenience: One advantage of using a credit card is the convenience it offers. With a credit card, you can make the purchase immediately and have the flexibility to choose from a wide range of engagement rings. This means you don't have to wait or save for the ring, giving you the ability to propose whenever you're ready.

Rewards: Another benefit of using a credit card is the potential for rewards or cash back. Many credit cards offer programs that allow you to earn cash back rewards and other perks on your purchases. If you have a rewards credit card, buying an engagement ring with it can help you accumulate points that can be redeemed for future purchases. For example, with the Discover it^® Cash Back credit card, you can earn 5% cash back on everyday purchases at different places you shop each quarter, up to the quarterly maximum when you activate.

However, you should avoid purchasing a ring on a card just for the potential rewards benefits. Carefully consider your finances and always aim to shop within your budget.

Interest: Another important consideration is the credit card interest rate. If you're unable to pay off the balance in full at the end of the billing cycle, you may accrue interest charges. Depending on your credit card's terms and your credit score, your interest rate can be quite high, adding to the overall cost of the ring. One way you can avoid this is by getting a credit card with a low interest promotional period, and paying off your purchase before the promotion ends.

Usage: You should try to avoid using too much of your credit limit to purchase an engagement ring. Unwise use of a credit card may impact your credit utilization ratio and thus credit score, after all, your credit utilization makes up 30% of your credit score, according to the Office of Financial Readiness. If purchasing an engagement ring leaves you with a high balance on your credit card in relation to your credit limit, it can impact your credit utilization. This can be a concern if you're planning to apply for other types of credit, such as a mortgage, in the future. You should always try to keep your credit utilization low.

There are several things to consider when using a credit card to finance an engagement ring. A credit card can be a convenient option, offering immediate access to a wide ring selection and the potential for rewards. However, it's important to consider the potential impact on your personal finances, such as high interest rates if you can’t pay back your purchase and the impact on your credit score rating. Before making a decision, it's recommended to compare different financing options and determine the best fit for your financial situation and goals.

What are the best credit cards for buying an engagement ring?

When it comes to purchasing an engagement ring, utilizing a cash back credit card can offer some advantages. Cash back cards provide a percentage of the purchase amount as a rebate, effectively giving you money back on your engagement ring expense. The benefits of using a cash back card when buying an engagement ring are twofold.

Firstly, by using a cash back credit card, you can earn a percentage of the purchase price back as cash rewards. This can give you some savings on a high-value item like an engagement ring. Depending on the card, the cash back can range from 1% to even 5% on specific categories or during promotional periods. With the Discover it^® Cash Back credit card, you can earn 5% cash back on everyday purchases at different places you shop each quarter, up to the quarterly maximum when you activate. This allows you to recoup a portion of the ring's cost and potentially use the cash back towards other wedding-related expenses or savings.

Secondly, cash back cards offer flexibility in redeeming your accumulated rewards. You can often choose to receive the cash back as a statement credit, which can directly reduce your credit card balance. Alternatively, you may have the option to receive the cash back as a deposit into your bank account. This freedom of choice allows you to use the cash back as you see fit, whether it's for additional purchases, paying down debt, or building savings with your partner.

Overall, the benefits of using a cash back credit card to buy an engagement ring include earning money back on your purchase and the flexibility to use those rewards according to your preferences. It's important to compare and research different cash back cards to find one that offers favorable cash back rates, low interest and annual fees (Discover has no annual fee on any of our cards) and aligns with your spending habits. By taking advantage of these cash back benefits, you can make your engagement ring purchase a little more affordable and potentially save money in the process.

Financing an engagement ring: Final thoughts

When considering how to finance an engagement ring, it's important to keep in mind your individual financial situation, credit score, and long-term goals. By carefully evaluating the available options of personal loans, jewelry store financing, credit cards, and using your savings, you can make an informed decision that aligns with your financial capabilities and preferences. Remember to consider the interest rates, repayment terms, and any potential fees associated with each option to determine the most suitable choice for you.

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