According to financial comparison company
moneynet.co.uk if you are buying an engagement ring it can easily set you back a four figure sum so unless you are a cash buyer it is worth looking at what financial options are available.
‘The smartest financing option is to buy the ring on your credit card and apply for a balance transfer card now so you can switch the balance across to an interest free deal when your statement comes through,’ said the company’s Andrew Hagger.
‘Ideally you don’t want to be paying for the ring for ever more, so it is probably best to try and get it all paid up over the next 12 months,’ he added.
There are a number of
cards offering 12 months or more interest free balance transfers, including Virgin Money for 16 months, Santander 15 months and
Egg 14 months, he points out. ‘Whilst there’s no interest to pay on these cards, just be aware that you’ll need to pay a one off charge of 3% to switch your balance,’ Hagger added.
An alternative but more costly option is to borrow on a personal loan, however loans for smaller amounts tend to be more expensive, so it’s worth spending a few minutes to check out the total amount you’ll have to pay back over the course of a year, he also said.
‘Finance isn’t as freely available as it once was, so if your credit rating isn’t in good nick, you may end up being charged a higher interest rate or in some circumstances even have your application declined,’ explained Hagger.
As an example, says that a £2,500 loan at 13.9% APR from Post Office or First Direct works out over £200 cheaper than a 22.9% loan from Halifax/Bank of Scotland.
‘Once you’ve got engaged you’ll no doubt be saving for your wedding and possibly a deposit on your first home, so don’t get off on the wrong foot and end up shelling out on finance costs that you can easily avoid,’ concluded Hagger.
