Hi Money Minder,
So, we’re planning our dream wedding and the question of finances has popped up. My partner thinks getting a new credit card (let’s say around 10k) is a good idea to earn points and pay it off within the 0% interest period of the first year. Currently, we have the cash sitting pretty in a high-yield savings account at 4.5%.
But here’s the dilemma – is it worth taking a hit on our credit scores (since we’re thinking of becoming first-time homebuyers in the next 1-2 years) or should we just pull the trigger and pay off the wedding expenses now? Alternatively, should we just stick with our current cards and rack up those sweet, sweet points?
If we do go for the new card, any recommendations on which ones you fancy?
First time reaching out for help here, I’m not exactly a finance expert, so forgive me if this sounds like a no-brainer question!
Thanks a bunch!
Desperate for Financial Wisdom
Response from THE MONEY MINDER:
Hello There,
Congratulations on your upcoming wedding! It’s great that you and your partner are planning ahead financially for the big day. In deciding whether to take out a new credit card to pay for part of the wedding, it’s essential to weigh the pros and cons carefully.
While the idea of earning points and taking advantage of a 0% interest promotional period may sound enticing, it’s important to consider the impact on your credit scores and your future financial goals. If you are looking to become first-time new homeowners in the next 1-2 years, maintaining a strong credit score is crucial for securing a favorable mortgage rate.
Given that you already have the funds in a high yield savings account earning 4.5%, it might be more financially prudent to pay for the wedding expenses upfront rather than accruing debt on a new credit card. By utilizing your current cards to maximize points and benefits, you can avoid any potential negative impact on your credit scores.
If you do decide to proceed with a new credit card, look for one that offers rewards and benefits that align with your spending habits and financial goals. Consider factors such as rewards structure, annual fees, and introductory offers when choosing a card.
Ultimately, the decision whether to take out a new credit card for wedding expenses should be based on what aligns best with your overall financial strategy and long-term goals. Remember, it’s always important to prioritize financial stability and avoid unnecessary debt when making financial decisions.
All the best from THE MONEY MINDER.
