BlueNile.com claims their credit card “offers compelling financing options” but in 2013 I beg to differ…
First of all let me be clear that I have nothing against Blue Nile. I applaud them for using conflict-free diamonds and generally giving lower prices compared to the brick and mortar jewelry shops. This review is nothing negative against the company, but rather Comenity, who handles the financing.
Their credit card can be a dangerous trap, depending on on which financing offer you signed up for…
Option 1: No Special Terms
If you charge your purchase to the card without using a promotion, then there will be a 25 day grace period, as is the case with most credit cards.
But if you don’t pay it off before the grace period, the APR you’ll be charged will be quite high coming in at 26.99% per the cardholder agreement (PDF file).
Option 2: No Interest If Paid In Full
This is perhaps the most dangerous of the three options…
At least they’re transparent up front about how this works. Notice the sentence at the top that says what will happen if your Blue Nile credit card account is not paid off in full. When that happens, the interest will be applied retroactively, at a rate that will make you cry in agony…
The takeaway? This is a risky proposition unless you are 100% confident in your ability to pay off credit card before the 6 or 12 months is up. If not, you’ll be hit with the finance charges retroactively. The only way to avoid that is to do a 0% balance transfer before your promotion is up, so it gets paid off in time at that rate.
Option 3: Equal Payments
With this plan, you agree to pay back over 24, 36, or 48 month term at a 9.99% APR.
9.99% is certainly more reasonable, but keep in mind that an already expensive diamond engagement ring will end up costing you a lot more when you finance it over such a long period of time.
And be warned because if you exceed the specified time frame, you will start paying at the higher 26.99%. Thankfully that higher rate won’t be applied retroactively, like what option #2 does.
How to save money AND lower your payments?
0% credit cards from major banks don’t use this “deferred financing” gimmick. With those, you end up getting 0% interest during the promotional time frame no matter what (regardless of whether or not you pay it off before then).
This is why the Blue Nile financing should only be a last resort. If your credit score is good enough, get a bank-issued card instead that gives true 0%. If you’re currently paying 9.99% or 26.99%, your payments will be substantially lower under a 0% plan.
Even though they say it requires “excellent” credit, I’ve heard from many who have just average credit getting approved for this sponsored card below. My recommendation would be giving the application a shot. If you are approved, move the balance from your Blue Nile credit card over to this card’s long 0% offer (which to reiterate, will give you true 0% interest).
This review was written or last updated June 2013