Should I Use a Credit Card to Pay for My Wedding?

Disclosure: Stilt is a lending company. Nonetheless, we are committed to recommending the best loan products to our readers when their needs are outside Stilt’s loan offerings. 

There’s nothing sweeter than a wedding. It’s the day where you celebrate the start of your life with your significant other – the day where the two of you finally become Mr. and Mrs. It’s a day packed with sunshine and rainbows, and everyone takes excitement in preparing for that day.

That is, until they see how expensive a wedding actually is. Sure, depending on what you get as wedding gifts (some communities like to give cash instead of purchased items), you may cover those costs in the end. But before that happens, you will have payments to make: venue deposits, florist deposits, caterer deposits – and all kinds of other deposits.

These deposits take a lot of money – money that you may not have on hand. In this case, a good option would be to go for a wedding credit card, as it will help you cover the costs much easier. But since credit cards also have their pain point, you might want to learn as much about them as possible.

Differences between a Loan and a Credit Card

Many people tend to put credit cards and loans in the same bundle – but while both represent money that you will eventually have to give back, they both work on a different system. Both of these options offer you access to funds – but depending on whether it is a loan or a credit card, you might have to return that sum differently.

A loan will allow you to borrow money in just one lump sum, with a relatively low interest rate. Once you have gotten your hands on that loan, you will have to make regular payments until what you borrowed has been repaid in full. The money will have to be given at scheduled dates throughout time.

On the other hand, while loans give you the lump sum right away, the credit card will give you access to a line of credit – a line that you won’t have to borrow all right away. As long as your credit card account remains in good standing and you pay back what you borrow on time, you may use the credit card as many times as you need. However, it tends to have higher interest rates in comparison to your average personal loan.

Pros and Cons of Getting a Wedding Loan

Now you know the differences between a loan and a credit card line – but when it comes to your wedding, which option should you choose? According to surveys about which you can read here, about 74% of the population is willing to go into debt in order to fund their weddings. Of those people, 61% plan to use credit cards and the rest plan to use a wedding loan.

But which is the right choice? It depends.

To make the correct decision, you will also have to understand exactly what each of them entails.

Pros of Getting a Wedding Loan

So, what are the perks of getting a wedding loan in favor of other types of loans? Well, on average, here is why people tend to choose them.

Fixed Repayment and Interest Terms

One advantage of going for a wedding loan is that you typically get it in an installment loan – meaning that you can get a fixed amount of money that you may repay at fixed dates over time. Since the installments are also the same every time, it will also be much easier for you to keep your finances organized.

Borrower’s Choice of Lender

Loans may be taken from a variety of sources: a bank, a credit union, or even an online lender. You are able to compare interest rates and go for the one that fits your finances the most. You may also look for lenders that make no prepayment penalties – so, your choices are pretty much endless here.

Borrow Only What You Need

The amount that you can borrow will pretty much depend on the lender – but in most cases, when you take out a loan, you may borrow exactly how much you really need. This will prevent you from accidentally slipping into a bigger circle of debt, as you won’t be tempted to stretch more than your arms allow you.

Potentially Lower Interest Rates

With a personal wedding loan, interest rates also tend to be lower. Obviously, this will also depend on your interest rate (you may read more about that by accessing this Forbes article), but even so, chances are that you might be able to get a better deal in comparison to other loans. This is why they are so popular among soon-to-be-married couples.

Cons of Getting a Wedding Loan

Just as there are some benefits when it comes to personal loans, there are also a few drawbacks that you might want to consider. Here are those drawbacks:

One More Monthly Payment

As if married life and possibly owning your own house with your spouse wasn’t expensive enough, now you also have to pay for your wedding loan every month. Before you sign up for this type of loan, make sure that you can afford to pay for it every month.

Potentially High Interest

Generally speaking, these types of loans have quite low interest rates. But these may also be very high if you have bad credit. Consider the health of your credit first, before you apply for this type of loan. Plus, a high-interest installment loan may easily hurt your credit score.

Pros and Cons of Putting Wedding Expenses on a Credit Card

That being said about personal loans, should you be using credit cards instead to fund your wedding? What are the perks and drawbacks of doing that? Well, here are all the facts in a nutshell.

Pros of Putting Wedding Expenses on a Credit Card

There are certain advantages that come along with credit card lines – all of which might make it a suitable choice for funding a wedding. Here is why the soon-to-be-married are going for credit cards instead.

Sign Up Bonuses

Quite a fair number of credit cards also come with a few hefty bonuses upon the signup. These bonuses might be in the form of points or cash – and the more you spend, the more bonuses you may get. What better time is there to earn free cash than when you are getting married – and when every dollar counts?

0% APR Periods

Unlike personal loans that have a fixed interest rate and APR (Annual Percentage Rate) straight from the beginning, most credit cards tend to have 0% APRs in the beginning – generally the first 12-18 months. This means that you should be able to make quite a lot of wedding payments with your credit card, without having to pay any interest whatsoever. If you’re lucky enough to finish with your wedding in only one year, then you can say you got an interest-free loan.

Consumer Protections

Unlike paying with debit cards or cash, credit cards offer you consumer protection. If anything goes wrong with a venue – or say, your caterer bails on you after you paid – you may easily file for a dispute. Credit cards typically offer you that peace of mind that you may get your money back.

Cons of Putting Wedding Expenses on a Credit Card

While credit cards are quite convenient when it comes to covering wedding expenses, there are also a few drawbacks that you might want to consider. These are actually the reasons why some people decide to go for personal loans instead.

Higher Interest Rates

Indeed, you may have the 0% APR at the beginning – but there is no guarantee that every credit card will work in the same way. Some credit cards will have you pay quite a lot in interest if you don’t pay up right away. Plus, if your wedding preparations last more than a year, you might end up having to pay up a lot once that 0% period ends.

Potential Credit Score Damage

The more you charge with your credit card, the more your credit utilization ratio increases – which can hurt your credit score. Imagine how big of a hit it’s going to take when you have to make big payments for your wedding. If you have any hopes of getting a mortgage right after you get married, then it might be difficult for you to find some good rates with that credit score.

Easy Debt Accumulation

The best part about credit cards is that you can swipe that piece of plastic and make a payment right away – but that can also be problematic. The average household in America has about $8,390 in credit card debt – and that’s mostly because it’s very easy to forget how much you are in debt when you don’t have the cash right in front of you. Because of that, debt can accumulate much easier.

Final Thoughts

A wedding credit card can be quite a convenient way of paying for your wedding expenses – provided that you use it correctly. However, you need to keep all the pros and cons in mind so that you won’t end up in even bigger debt.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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