Engagement Ring Financing and Why To Avoid It

Olivia Clifford  |

Proposing to your significant other can be one of the most exciting and invigorating times in your life. When it comes down to choosing the right ring at the right price it can be more then frustrating. Many people live in fear of the well-known phrase, “Bigger is better”, and future fiancés are no exception. Most American’s are willing to jump into debt to get the right ring through financing their purchase. The average price of an engagement ring within the United States in 2011 according to the XO Group Inc. and their Engagement and Jewelry Survey was around $5,200. It was then found that around 12 percent of those American’s purchasing the rings were spending over $8,000 a ring. 

Most well established and branded jewelry stores offer interest free financing on their pieces for an average of six to 12 months. This financing was then limited changed after the 2009 CARD Act that was signed into legislation by President Obama. The problems that many uninformed buyers then run into after financing their ring purchase are the hidden fees that come about with missing a payment or failing to pay of the balance. Most, if not all well-known jewelry store brands will charge their customers who chose to finance an interest that begins on the day they purchased the ring versus the end of the promotional deal.  With interest rates averaging around 25 percent, this could mean hefty added charges. 

In order to avoid paying the large interest rates and subsequent large sums of money on an engagement ring, there are many other options that a person can choose. It is never recommended that one finance an engagement ring unless they are entirely certain that they will be able to pay off the total balance by the end of the promotional deal. Other avenues include buying a ring that is within your immediate means while saving for an upgrade, searching the Internet to find better deals on diamonds and ring setting and well as not being afraid to negotiate with the sellers.  

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