As the wedding season approaches, couples are digging deeper to book venues, compile guest lists, hire a dizzying array of vendors, and pay for it.
According to research by wedding website The Knot, the average U.S. wedding cost in 2022 will be $30,000, up $2,000 from 2021. Weddings have long been expensive, but inflation is driving up costs.
The couple may become more and more popular.”BUY NOW, PAY LATER” payment plans to ease the burden. These plans allow you to pay the total cost of your purchase in installments. In many cases, there are no interest and no fees if you pay on time.
But there are risks with them, and there may be better ways to fund a wedding.
How to buy now and pay later for a wedding
Popular buy now pay later providers like Affirm, Afterpay and Klarna partner with thousands of merchants, including retailers in the wedding industry.
Partner with David’s Bridal, Men’s Wearhouse, Kay Jewelers, Zales, and more to offer your customers postpay plans. By choosing Affirm when checking out online or in-store, some retailers allow couples to split payment for wedding-related purchases at no extra charge.
“Wedding planning can get really out of hand, and options like Affirm help couples take back that financial control,” said Katrina Holt, senior vice president of operations at Affirm. “It’s a bite-sized payment method that fits the way couples are accustomed to budgeting.”
The repayment terms for the buy now, pay later plans vary from 4 installments where the total cost is split into 4 equal payments every 2 weeks, to monthly payment plans for up to 5 years.
Getting approved for these plans is often easier than traditional credit. Applications are short and most providers only perform soft credit checks and have no minimum credit score requirements.
Providers like Affirm help couples fund small purchases, while others focus on the cost of large weddings.
Maroo, a payment processing platform with postpay options, allows couples to pay wedding vendors (think photographers, musicians, caterers, and even venues) over 3, 6, or 12 months. can do.
“If you can buy Peloton in installments, why can’t you pay for a large portion of your wedding in installments?” said Anja Winikka, Co-Founder and Chief Marketing Officer of Maroo. “They are huge expenses that ultimately leave the couple facing cash flow problems and putting the wedding bills on high-interest credit cards.”
Maroo does not charge interest and, like other providers, only requires a soft credit check to qualify.
Risk of buying now and paying later for your wedding
While these plans help split purchases, couples should be careful as they tend to encourage overspending.
If you’re on a tight budget but want to manage your monthly cash flow, the Buy Now, Pay Later plan might be a good option.
“But people who can’t have a wedding without doing this? That’s who I don’t think these payment plans are for,” she says.
Slagle encourages couples to think about their wedding in the light of other plans, such as buying a home or having children.
“Is this going to be the only financial hurdle we face in the next few years? Because from my professional experience, it’s not,” says Slagle. “How are you preparing for financial success after marriage?”
The industry also faces federal scrutiny. In September 2022, the Consumer Financial Protection Bureau will Announcing Survey Findings on Buy Now, Pay Later Among its concerns, he cited inconsistent consumer protection, data security and debt accumulation.
a secondary researchReleased in March, it was found that users who buy now, pay later were more likely to show signs of financial distress than non-users.
Other payment methods for weddings
the best way pay for the wedding It comes from savings, Slagle says. Another option for him is a gift from family or an interest-free loan.
If you need funding, you have options other than buy now and pay later.
A credit card can help you earn cash back and points that can offset other expenses, such as your honeymoon. To avoid compounding interest, you must repay the balance every month.
Another option is a wedding loan, which is an unsecured personal loan from a bank, credit union, or online lender that covers your wedding expenses. These loans charge a fixed interest rate and have predictable monthly payments, but the interest rate can be higher depending on your credit score.
This article was written by NerdWallet and originally published by The Associated Press.