Weddings are a day filled with love, dancing, and memories to last a lifetime. And while those aspects supersede the headaches that come with wedding planning, we can’t avoid the struggles (or bills!) that come with orchestrating your big day. According to the Wedding Wire Newlywed Report, the average cost of a wedding is typically around $28,000. Considering the state of the economy, it’s safe to assume that not every couple is sitting on a near $30K nest egg—especially if you’re paying for your wedding yourselves. Reportedly, 32% of them found assistance in the use of credit cards.
Before you join the population of couples who used credit cards to sponsor their nuptials, here are the details you should know when searching for the best credit cards for wedding expenses.
Map out your strategy.
Not so fast! Before you get excited by promotional deals and flashy statistics, sit down with your partner and have a thoughtful conversation about your finances and the utility of this card. Here are a few guiding steps to move you in the right direction.
Determine your greatest “why” for getting a credit card.
If you neglect to have this level of financial intimacy, troubles could arise, or you could be setting yourself and your spouse up for more financial strife as a married union.
Individuals decide to use a credit card for countless reasons, from building credit to make ends meet during a season of life. By addressing your “why,” you’re able to see which rewards will be most impactful or if a credit card is the best choice at all. Remember that using a credit card can mean credit card debt for some couples—are you okay with entering into your marriage with potential debt?
Know your credit score and how applying for a card can affect it.
Applying for a credit card can result in a hard inquiry for your credit report. It can lower your score, often by a few points, or be considered when a lender determines your application's status. One hard inquiry in a short amount of time likely won’t affect your credit much. However, if you start applying for several credit cards, you could face greater consequences.
Compare the options.
When comparing the different credit card options available, it’s important to look at the good, bad, and ugly that will follow once your new piece of plastic comes in the mail. For example, you may be ecstatic to see that your credit line is in the double digits, but you may get deflated once you see your interest rate.
You’ll certainly want to compare the following: rewards, rates, and fine print.
We’ll start with the fun part — rewards! What makes a credit card advantageous is what you can earn from them: travel points, cashback, and sign-on bonuses. Here is what could be in store for you and your partner.
Sign Up Bonus: So, “sign up bonus” is a tad misleading. Here’s what it is: a sign-up bonus is a promotion offered as an incentive to apply for a card and begin using it regularly. Aka, this isn’t going to matter much if you want an “only in case of emergency” card that you never touch.) Typically, once you spend a specific amount of money in an established timeframe (e.g., ‘Once you spend $3,000 in the first three months…”), you will get a bonus. We often see bonus payouts at the $500 or less benchmark.
Cash Back: A cash back reward program is a rewards program where a small percentage of the amount spent, typically 1 to 3%, is paid back to the cardholder. For example, if your card earns 2% cash back on all purchases, and you buy bridesmaid gifts for $80, you earn $1.60 in cash back. Or if the card earns 5% at the grocery store; in that case, a $40 liquor run could earn you and your partner $2.00. While it may seem small, over time, this could amount to hundreds of dollars per year. (And hey, if you’re already going to spend the money anyway, you might as well get a little bit back.)
Loyalty Rates: Something you don’t find as often is loyalty programs. But when you do, you’ll come across lenders and banks who want to reward your commitment to their branch or institution. This reward can come in the package of many gifts, including travel credits, airport lounge access, and lower annual fees. This may be a great option if you’re looking to find your “forever home” with one financial institution or have more long-term goals like owning a home.
If rewards give us the “kid in a candy store” feeling regarding credit cards, rates are its older, “adulting” counterpart. Rates determine how much you’ll owe a lender in the end and what the repayment plan will look like.
Minimum Payment: This is the amount of money due each month based on your statement. Most often, this is a percentage of your statement balance, but in some instances, it can be a flat fee.
Interest Rates: Your interest rate is the amount due per period, as a proportion of the amount lent, deposited, or borrowed. Per WalletHub, the average credit card interest rate is 18.24% for new offers and 14.75% for existing accounts.
The Fine Print
Credit card promotions are doing a good job if they pull you in, but it’s wise to read past the promises and get down to the fine print. When reading your agreement or marketing materials, be sure to take a longer pause when learning about the following:
- Annual fees
- Foreign transaction fees
- The expiration date for rewards or points
- The standard APR
- The balance transfer APR and balance transfer fees
- The cash advance APR and cash advance fees
- The penalty APR
Make your final decision.
It’s important to stress that while credit cards are incredible tools when used responsibly, they do not equate to free money. Further, the money you’re loaned with a credit card will likely demand interest. So be diligent and precise when researching the best card for you and yours, and understand that paying off consumer debt is a lot like marriage: it takes patience, thoughtfulness and should be a hasty decision.