How to fund wedding expenses with a credit card

By Emma Lunn

Your wedding day is supposed to be the happiest of your life -- but it can also be the most expensive.

Although the recession means the average couple is spending less on their big day than a few years ago, getting hitched is still a costly experience. According to website CompareWeddingInsurance.org.uk, couples spent an average of £14,441 getting married in 2012, and expects couples to spend around £10,800 (or £13,800, including the honeymoon) in 2013.

Saving up more than £10,000 can be difficult, making it tempting to reach for the credit card. If you plan to use plastic to fund your wedding, make sure to take full advantage of the protections and rewards cards provide -- while staying out of debt.

How to avoid wedding debt
Make sure you don't use your card as a license to spend more than you can afford. The key to that is drawing up a budget.

Sandy Moretta, director of the UK Alliance of Wedding Planners recommends that couples sit down with anyone else contributing to the wedding and set spending caps for each expense, including the venue, catering and photographer. Just be sure to set aside about 10% for emergencies.paying-for-wedding-with-credit-card

Still coming up short? Consider changing your spending habits before reaching for the credit card.

"There are little things you can do to boost the budget to some degree, such as each giving up something you buy regularly but could make instead," Moretta says. "Maybe that coffee and pretzel you buy every day on the way to work could be breakfast eaten at home?"

She points out that saving £4 per working day would save you almost £1,000 over the course of a year.

Whenever you're struggling with your wedding budget or feeling tempted to overspend, remind yourself that you're learning vital skills for married life.

"Try to stick to your budget rather than overspending and starting married life in debt," Moretta says. "If you can budget for a wedding together, agreeing over holidays and household expenditure should be a doddle."

Smart use of credit
Although getting in debt to get married is a poor choice, using your credit card for some wedding expenses can be a shrewd move. For large purchases, Section 75 of the Consumer Credit Act of 1974 is a useful piece of protection for consumers. If goods and services aren't delivered as promised (or not delivered at all), you could be eligible for a refund from your credit card provider, as long as the original cost was between £100 and £30,000. Section 75 does not apply to purchases made via cash, debit card, prepaid card or cheque -- only to credit cards.

"If you pay even a part of the cost on a credit card for a specific element of your wedding which costs between £100 and £30,000, should a firm you paid go under, your credit card company is jointly liable for the full amount," Moretta says.

Say, for example, your catering company goes bust or the band you hired doesn't turn up. If you paid for those services with credit, you shouldn't lose out on the money you spent.

Choosing the right card for wedding spending
If you've decided to fund your wedding with plastic, the right credit card can help save you money.

Think you'll need some extra time to pay off wedding expenses? A card with a 0% interest offer on purchases could save you. The best deals at the moment are 17 months from Halifax and 16 months from Tesco. If you run up a balance on your regular card, you might consider a balance transfer soon after the wedding. The balance transfer market is currently extremely competitive, meaning that you can transfer a balance to a card that offers 0% interest on the amount you transfer for up to 26 months. Just be sure to have a plan in place to pay off the balance in the 0% interest time allotment.

If you're the type of person who always pays the balance in full and on time, you can also take advantage of the many rewards cards on offer. A cash-back or travel rewards card, for example, can help you earn cash or travel points -- which you could put towards purchases for your new home or for your honeymoon travels.

If you can time it right, you might even be able to use your wedding spending to take advantage of a sign-up bonus. The American Express Platinum Cashback card, for example offers new cardholders 5% cash back for the first three months on up to £2,000 spending. Assuming you put £2,000 of your wedding expenses on the card within three months, that's £100 that could be used to pad your wedding budget.

Keep in mind, however, that if you do not pay the balance off in full by the due date, interest charges will likely cancel out any rewards you earn.

See related: 3 signs your relationship is headed for financial trouble, Personal finance experts share love and money tips

 

Updated: 7 May 2013