Should You Pay for a Wedding With a Personal Loan or a Credit Card?

Weddings come in all sorts of shapes and sizes. But whether you’re looking to throw a small, intimate event or the blowout of the season, there is one thing that weddings often have in common: a high price tag.

Based on recent data from The Knot, the average couple spends nearly $34,000 on their big day. And according to a global wedding report by The Knot and WeddingWire, more than 28% of couples in the US will go into debt in order to pay for said wedding.

So, when it comes to funding your own wedding day expenses, what should you do if you don’t have adequate money in savings (or don’t want to use that money to cover the costs)? Is it better to use a personal loan or a credit card?

Paying for a Wedding: Credit Cards vs Personal Loans

In the most basic sense, credit cards and personal loans aren’t all that different:

Both involve borrowing someone else’s money to pay for today’s expenses. Depending on your credit history, income, and other key factors, your lender will determine how much you’re able to borrow with either financial product.

You’ll typically pay interest to your lender on the balance owed, whether you use a credit card or a personal loan to pay for your wedding. These interest charges can easily add up to hundreds (or even thousands) of dollars, depending on how long it takes you to pay off the balance and what interest rate you’re charged along the way.

Both credit cards and personal loans require you to apply and qualify for funds before an account can be opened. You’ll also need to agree to repay the debt back over time, through regular monthly payments. If you fail to make these payments as agreed, you may face late fees, penalty interest, and negative reports on your credit.

While there are obviously many similarities between these products, however, there are also some important differences to note. 

Using a Credit Card to Pay for a Wedding

For many couples, using a credit card to pay for wedding expenses may be an easy choice, especially if they already have a credit card handy that has an available balance. 

WeddingWire found in another study that this is exactly what 30% of couples did. They used an existing credit card account to cover some or all of their wedding expenses, paying off the balance in the months that followed. And another 6% of couples chose to open a new credit card account just for those Big Day bills. 

Benefits of Using a Credit Card

It’s no wonder that credit cards are a popular option for engaged couples. Here are a few of the biggest benefits they offer:

• They’re convenient. Many couples already have a credit card account or two, or are willing to apply (which can take just a few minutes online). Once the wedding is over, those accounts can be used for a honeymoon, new home costs, or everyday expenses.

• They may offer introductory interest rates. Some credit card issuers will offer 0% APR to new cardholders on purchases made within a certain period of time. This makes it easy to pay off those big wedding costs over multiple months, without accruing finance charges on the balance.

• They could offer rewards. Today, there are many different rewards credit cards to choose from, offering everything from cash back to points and miles on the purchases you make. If you’re spending thousands of dollars on a wedding anyway, it can make sense to maximize the cash back opportunities offered, saving you extra money in the end.

• They offer protections. Credit cards offer certain purchase protections for cardholders. If something you order never arrives (or is wrong/damaged), your credit card issuer may be able to credit your account for the transaction. If a vendor doesn’t show up on your wedding day or perform according to their contract terms, your credit card issuer can step in then, too.

Drawbacks of Using a Credit Card

Credit cards aren’t the perfect choice, however, and have some downsides to consider:

• Interest rates can be high. The average APR on a credit card is over 16%, though many cardholders have rates well into the 20s. If you don’t pay off your statement balance in full, you could find yourself paying quite a bit in interest over time.

• Vendors may charge processing fees. Many wedding vendors will pass along credit card processing fees to their clients. These surcharges are common among venues, photographers, caterers, and even musicians, and can commonly mean paying an extra 1% to 5% on top of your total bill.

Using a Personal Loan to Pay for a Wedding

Applying for a new personal loan can be more involved than whipping out an existing credit card. For many couples, though, this can be the best way to pay for big wedding expenses.

Benefits of a Personal Loan

Here are some of the upsides to taking out a wedding loan:

• The money is available in one lump sum. A personal loan is an installment product; this means that you’ll receive your loan amount in one lump sum, which you’ll repay in equal monthly installments until the debt is satisfied. Because of this, you’ll have your entire loan amount available to you from the date of disbursement.

• Interest rates are typically lower than with credit cards. The average credit card interest rate, as mentioned above, is over 16%. The average personal loan interest rate, however, is only 9% — and for many creditworthy borrowers, rates can be even lower.

Drawbacks of a Personal Loan

Of course, there’s are a few downsides to note:

• There are no 0% APR offers. Unlike 0% APR credit cards, you’ll be hard-pressed to find a personal loan offering no interest. 

• No consumer protections are offered. Using funds from a personal loan usually means paying with cash, check, or a debit card. If a vendor falls through at the last minute or your wedding dress never arrives, your consumer protections will be limited (or non-existent!).

• There are no rewards. Credit card rewards can be a great way to earn cash back or valuable points/miles on the money you’re spending anyway… but personal loans don’t offer any such rewards. 

The Bottom Line

Unless you have tens of thousands of dollars available in savings, paying for a typical US wedding may mean borrowing money. Whether you choose to pay for those wedding expenses with a personal loan or a credit card depends on not only your credit history and income, but also the protections and features that mean the most to you.