Saturday, January 30, 2010

Credit cards for wedding purchases

We use the Amex Blue Cash card that gives us up to 5% cash back at supermarkets, gas stations and drug stores and 1.25% for all other purchases.

You may want to consider using a credit card to pay for your wedding purchases.

Here are some reasons why:

Improved credit rating.
The better the rating you have the easier it is to get loans quickly and with a low interest rate. When you make purchases and pay off the card, this helps.

The perks.
You can get a credit card with frequent flyer miles or cash back, etc. Weddings are generally expensive so the more you use a credit card with perks, the easier it will be to get the rewards – and you can use the rewards for your honeymoon (flyer miles) or general happiness (seeing cash back at the end of your billing year).

Consumer Protection.
If you pay a vendor in cash and they go bankrupt or are seized by the State due to back taxes, you won't see your money again. However, if you pay with a credit card and they go bankrupt before your wedding or you never get your photos/video, you can call your credit card company to see about getting your money back. (Also, heaven forbid something should happen to your photog after the wedding and before your album is complete, you'll be in a better position to at least get some of your money back.) There are time limits for when you can place a claim, but often credit card companies have an understanding of wedding woes, want your business and will work with you (especially if you pay of your balance each month, etc).

[For more information, see the Federal Trade Commission's website.]

It's easy.
If you pay by a personal check, you still need a receipt. Yes, a canceled check works as a receipt – but what if that vendor loses the check or never received it, or claims to never receive it? Without proof, you have nothing.

In the meantime, they could potentially book another couple for their services, etc. So each time you pay by check, you will need to also get a receipt; you'll have to file that receipt and keep it on hand. Once the credit card has been charged (not the date you see it appear on your credit statement), you have a de facto contract. You can look up your credit card statements online, it's that easy. If you use your card for a $5 purchase at CVS, why wouldn't you use it for a few thousand dollar purchase?

You should know:
#1 -- A wedding budget (and your monthly budget in general) need to be set so that you don't go over your spending limit so that you can be able to pay off your purchases. If you have a year to plan and pay for your wedding, it's great if you can spread out purchases so that way you're not having a hefty amount on your card at the same time. Many credit card perks require that you pay off you're entire balance each month in order to retain the perks, so be sure to understand the card's requirements.

#2 -- Also, not all vendors accept credit cards as they have to pay a fee to the credit card companies for allowing them to use it. I understand their viewpoint, and if they are a hobbyist in the wedding industry I am ok with that viewpoint. However, if they have a full-time business, I am personally not ok with that. Full-time small business owners all over America take credit card -- and the wedding industry in Buffalo should too. Therefore, if this is a factor that may decide where you put your purchasing power, be sure to ask all potential vendors.

#3 -- A debit card does not offer the same protection as a credit card.