With the cost of weddings skyrocketing, couples are turning to alternative methods to pay for their big day.
Nearly three-quarters of couples planned to take on debt for their nuptials, according to a Student Loan Hero survey, and 61 percent said they planned to use credit cards to cover some of their expenses.
Using a credit card to pay for your wedding could be a financially savvy move if you have a plan to use the card to your advantage. But by putting nonessential expenses on your credit card, you risk plunging into unnecessary debt.
Pros to Using a Credit Card for Wedding Expenses
Here’s how using a credit card for your wedding expenses could actually be a savvy move.
- You can earn rewards points
Some credit cards have robust rewards programs that could translate into big savings.
For example, the Chase Sapphire Reserve card offers 50,000 bonus points if you spend $4,000 in the first three months, which you can use to book about $750 worth of air travel and hotels if you book through their rewards platform.
With the right card and a little planning, you could cut down a significant part of your honeymoon costs with rewards points earned from your wedding spending.
If you have enough cash on hand and can repay your monthly credit card bills in full, this route could be a smart way to earn vacation points for your normal spending.
- A no-interest card could give you more time to pay
If you don’t quite have enough cash saved for your wedding, a low- or no-interest credit card could help you cover expenses.
If you open a credit card with a 0 percent introductory rate, for example, you won’t pay any interest on your purchases until the period expires. Using a card like this could give you more time to pay for urgent wedding costs that haven’t been budgeted.
If you use this strategy, make sure to compare cards with a 0 percent APR, or annual percentage rate, to find the best fit for you. Be sure you know when your introductory rate expires. If you don’t repay your balance before this happens, you could be stuck paying a high interest rate.
- You can borrow exactly what you need
If you must borrow for your wedding, credit cards could offer more flexibility. Unlike personal loans, for which you must request a specific amount of cash to borrow, you can charge as much or as little to a credit card as you need each month (up to your credit limit, of course).
This is particularly valuable if you don’t need to borrow much because many lenders don’t offer loans for low-dollar amounts. It’s never wise to borrow more than you need, so if credit cards can help keep your debt lower, they might be beneficial.
But this convenience can come at a cost. Depending on your credit history, you could face significantly higher interest rates by using a credit card. Review your options and do the math before deciding which type of debt offers the best deal for your situation.
Cons to Using a Credit Card for Wedding Expenses
There are some drawbacks to using a credit card to pay for your wedding. Here’s how to weigh the cons.
- You could pay high fees
Even though some credit cards have extensive rewards programs, they don’t automatically translate into a great deal. If your card carries high annual fees and interest rates, those expenses will eat into your rewards.
For example, the Sapphire Reserve card mentioned above has an annual fee of $450. Before signing up, make sure you’ll be able to earn enough rewards to make up for the added cost.
- Some cards require excellent credit
Many of the cards with great rewards programs or good interest rates require you to have excellent credit to be approved. If your credit isn’t great, you might have a hard time qualifying for the cards you want.
If this is the case, either work to improve your credit before applying or find an alternative route for financing your wedding, such as a small personal loan.
- You might add to your debt
If you’re unable to pay your credit card bill in full each month, you’ll begin your marriage in debt. Even if you have a plan to pay it back quickly, life has a way of surprising you with emergencies or inconveniences, which could cause you to postpone your credit card repayment.
For some couples, taking on a small amount of debt to pay for their dream wedding is a fair trade. For others, adding debt to the stresses of wedding planning might not be worth it. Make sure you and your partner agree about how you plan to pay for everything.
If you decide to use a credit card to pay for part of your wedding expenses, there are two important steps to take:
- Research the best cards.Make sure you’re getting the best deal when it comes to interest rates, fees, and rewards points. Take the time to shop online and compare credit cards before signing up for anything.
- Create a repayment plan.Don’t put any expenses on your credit card until you have a plan in place for paying them back. It could help to use an online calculator to see how long it will take you to repay your debt and what your monthly payments should be.
Credit cards can be a financially smart tool — or a dangerous doorway into debt. If you’re going to use a credit card for your wedding, make sure you plan ahead and get as much out of the credit card as possible while minimizing your risk.
If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated every 14 days.