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

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

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• 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 15.74% - 24.49% Variable 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. 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.

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. 

Can you finance an engagement ring?

You do have the option of financing a 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.

Here are a few of the financing options available through popular jewelers:

• Blue Nile: Financing is available via Blue Nile's credit card. Depending on the price of the ring, consumers enjoy 0% APR for the first six, 12 or 18 months after purchasing. If you choose a longer payment plan, with equal payments, there's a 9.99% APR.
• Ritani: Ritani offers financing via a Synchrony bank credit card. You can choose from the following options: no interest for 12 months, 9.99% APR for 36 months, or 9.99% APR for 60 months.
• Tiffany & Co.: The brand's credit card offers a 0% intro APR for 12 months, or a 7.99% APR for 24 months.

However, jewelers' financing options may not have the best terms or interest rates, and you generally won't get any cash back or rewards on the engagement ring purchase.

Your other payment options

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.

Fortunately, there's another 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. 

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

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.

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 Chase Freedom Unlimited®.

That's because in addition to offering a long 15-month term on the 0% introductory purchase APR (which goes up to a normal 15.74% - 24.49% Variable afterward), it offers 1.5% cash back on most purchases, and a sign-up bonus of 1.5% cash back in addition to regular earning on everything you buy up to $20,000 spent in the first year (worth up to $300 cash back) (the Chase Freedom Unlimited® also recently started offering bonus cash back on eligible travel and drugstore purchases). 

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 Chase Freedom Unlimited® 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.

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

• Blue Cash Everyday® Card from American Express: 0% intro APR on purchases for 15 months (then 15.49% - 25.49% Variable) (See Rates)
• Capital One Quicksilver Cash Rewards Credit Card: 0% intro APR on purchases for 15 months (then a 15.24% - 25.24% (Variable))
• Capital One SavorOne Cash Rewards Credit Card: 0% intro APR on purchases for 15 months (then a 15.24% - 25.24% (Variable))
• Citi Simplicity® Card: 0% intro APR on purchases for 12 months and on balance transfers for 21 months (balance transfers must be completed within 4 months of account opening) (then a rate of 15.49% - 25.49% Variable) 

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.

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