Interest free credit vs using savings

Mahsroh

Hi all,

Just wondered what peoples views are on this (i'm really in two minds!).

I'll be spending £1,500 - £2,000 later this year on an Engagement ring! :eek:

I have the cash - I can pay it off in one go, but most high street jewelers seem to offer interest free credit. Part of my brain tells me it's a no-brainer and why use my savings when it costs nothing to spread the costs? The other part of my brain can't justify getting into a credit agreement when I don't need to.

I literally change my mind on a daily basis!! Just curious really to get other peoples thoughts on it!

CLAPTON

Mahsroh wrote: »

Hi all,

Just wondered what peoples views are on this (i'm really in two minds!).

I'll be spending £1,500 - £2,000 later this year on an Engagement ring! :eek:

I have the cash - I can pay it off in one go, but most high street jewelers seem to offer interest free credit. Part of my brain tells me it's a no-brainer and why use my savings when it costs nothing to spread the costs? The other part of my brain can't justify getting into a credit agreement when I don't need to.

I literally change my mind on a daily basis!! Just curious really to get other peoples thoughts on it!

how long does the interest free period?
what are the repayment terms

Pixie5740

If you can get 0% finance then it makes sense to use it to purchase the ring rather than your savings. If you want to be more MSE about your purchase then try and get to London's jewellery centre at Hatton Gardens. You will pay a premium using a high street retailer so could get a better quality diamond (or other stone) from Hatton Gardens.

August is traditionally a slower month for jewllers so that's when you would probably be able to negotiate the best price. Whereas the run up to Christmas and Valentin's Day are their busiest times of year.

MallyGirl

If I were the girl I would not want to think you had to borrow money for such a thing - I would feel better knowing it was paid for with money you had saved up and could afford.
Presumably there will be future expenses coming up - get the 'save for it before spending' mindset in place now and you are starting your lives together on great foundations.

Congratulations!

Mahsroh

MallyGirl wrote: »

If I were the girl I would not want to think you had to borrow money for such a thing - I would feel better knowing it was paid for with money you had saved up and could afford.
Presumably there will be future expenses coming up - get the 'save for it before spending' mindset in place now and you are starting your lives together on great foundations.

Congratulations!

Thank you! But she hasn't said yes yet! .... although she's dropping enough hints!

Mahsroh

CLAPTON wrote: »

how long does the interest free period?
what are the repayment terms

I've seen all sorts of terms available.... anything from 6 months to 4 years, with flexibility over deposits too.

Mahsroh

Pixie5740 wrote: »

If you can get 0% finance then it makes sense to use it to purchase the ring rather than your savings. If you want to be more MSE about your purchase then try and get to London's jewellery centre at Hatton Gardens. You will pay a premium using a high street retailer so could get a better quality diamond (or other stone) from Hatton Gardens.

August is traditionally a slower month for jewllers so that's when you would probably be able to negotiate the best price. Whereas the run up to Christmas and Valentin's Day are their busiest times of year.

August is the current plan, so that's very useful information!!

JimmyTheWig

May as well take free credit where it's offered. It's a form of Stoozing. Leave the money in your account earning interest while you can.

But this only works if it really is free credit.
It could be 0% interest but with arrangement fees to pay (i.e. not 0% APR).
Or you may be able to get a discount on the ring if you didn't use their 0% deal.

Mahsroh

JimmyTheWig wrote: »

Or you may be able to get a discount on the ring if you didn't use their 0% deal.

That thought had crossed my mind, but I think high street retailers who offer 0% are usually reluctant to do this as it belittles their interest free credit offer. My parents tried to negotiate a discount with DFS for upfront payment and they were having none of it!

Cycrow

assuming you cant get it cheaper by paying upfront. Then it will make sense to use the interest free period then put the month into a savings account to earn interest until you need to pay it off.

but it really depends how disciplined you are, what are the chances you might end up spending the money later ?
If there's a chance, it might be worth just paying upfront, otherwise you may end up with not enough money at the end of the term to cover it and could be hit with a big amount of interest to pay

ViolaLass

MallyGirl wrote: »

If I were the girl I would not want to think you had to borrow money for such a thing

But he does have the money. It's just about which is the more financially sensible thing to do.

Just another thought OP, are you sure she'd want you to spend that kind of money? I would have been horrified if my husband had spent that figure on a ring.