Is the Helzberg Diamonds credit card really the best way to pay for your jewelry? You need to take a closer look…
Thanks to the surging prices of gold, silver and platinum during the past several years, being able to afford jewelry is now more difficult than ever. Because of this, you may be thinking about using a credit card. Well, here’s why you will want to think twice about the Helzberg Diamonds card…
The interest rate shocker
For starters, I want to point out that this card has an extremely high interest rate. At the time of this review, the Helzberg credit card application listed the standard APR at 24.9% and the penalty APR at 28.9%.
The financing promotion gimmick
Without a doubt, this is what sparked your interest in the card. However many people don’t understand how these no interest promos really work. It’s very important that you read what I’m about to say…
At any given time, the Helzberg credit card will run promotions that are no interest if paid in full within X number of months. As of January 2011 these were the two offers they featured:
On purchases of $749 or above, no interest if paid in full within 12 months
If your purchase is less than that amount, then you can get this…
On any purchase, no interest if paid in full within 6 months
These sound like good deals, right? Well, not necessarily. Here’s why…
These are deferred interest promotions. That means if you don’t pay off every dollar of the entire purchase price before the promo period is up, you will be charged interest going back to the date of purchase on the full price you paid!
So let’s say you spent $3,000 on engagement rings using your Helzberg credit card. There would be no interest charged if all $3,000 was paid off BEFORE the 12 months was up. But if you were only able to pay off $2,500, after the 12 month mark you would get socked with interest charges on the entire purchase price going back all the way to the date of purchase. And when you consider their astronomically high interest rates, that will be a small fortune in interest charges!
Should You Have The Card?
To be honest, I can think of only two scenarios where the Helzberg credit card might make sense. Everyone else should avoid it like the plague.
Scenario A: You are 100% positive that you will be able to pay off the full amount before the promotional period ends. However the problem is, who can honestly be 100% sure in today’s economy? Layoffs, pay-cuts, car repairs, medical bills, and other unforeseen circumstances may change your financial situation a few months from now.
Scenario B: The Helzberg Diamonds credit card is purportedly easier to get approved for than a traditional credit card. So if you have bad credit and can’t qualify for anything better, then applying for the Helzberg card would probably make sense.
What to do if you currently have the card?
If you currently have this credit card and are approaching the end of your deferred interest promotion, then you should definitely consider doing a balance transfer so you can pay it off before the deferred interest kicks in.
What to do if you’re thinking about applying?
As mentioned above, I would only recommend this credit card to those with bad credit who can’t qualify for something better. For everyone else, I would recommend a major credit card instead. Why? Because when they offer 0% promotions on purchases, the interest is not deferred. So if it ends up taking you longer than the promo period to pay, you won’t be smacked with the back interest. Here’s a sponsored ranking: