Using Credit Cards For Wedding Expenses: Reward Points vs Interest Risk

Weddings in India are often large and lively occasions. They usually involve several ceremonies, lavish venues, and days of celebration. Although traditions and customs vary from one region to another, the one thing that rarely changes is how costly the celebrations can be.

Many couples spend their life savings on their special day. When that’s not enough, borrowing becomes necessary to bring their wedding dreams to life. With the wedding season underway, it’s wise to consider different funding options.

In this guide, we will consider the pros and cons of using credit cards for funding wedding expenses.

Reward Points And Cashback

Many credit cards in India, such as those from HDFC, SBI, ICICI, or American Express, offer reward points, cashback, or travel miles for every transaction.

For big-ticket wedding expenses like booking a banquet hall, paying caterers, or purchasing gold jewellery, these rewards can add up significantly.

Some cards offer higher rewards for specific categories like jewellery or travel bookings. These are common wedding expenses.

Flexible Payment Options

Credit cards allow you to pay for expenses up front and settle the bill later. Many banks also offer EMI (Equated Monthly Instalment) options for large purchases, letting you spread the cost over 6–24 months. This can be particularly helpful for big expenses like wedding outfits or honeymoon packages.

Convenience And Discounts

Credit cards are widely accepted by wedding vendors, from event planners to online jewellery stores. Many banks partner with popular brands to offer exclusive discounts or cashback, which can reduce your overall wedding costs.

High Interest Rates

The interest rate on credit cards in India can go over 40% annually. If you only pay the minimum amount due on your bill, the remaining amount accrues interest. This can snowball quickly.

Further, unlike home or personal loans, which have lower interest rates, credit card debt is far more expensive.

Temptation For Overspending

The ease of swiping a card can lead to overspending, especially during the emotional and pressure-filled wedding planning process. This can result in a debt burden that lingers long after the wedding celebrations are over.

Impact On Credit Score

Missed or late payments can damage your credit score, affecting your ability to secure loans in the future. In India, CIBIL scores are critical for loan approvals, and defaulting on credit card payments can lower your score significantly.

To conclude, a credit card is a powerful financial instrument. Using it can be a smart move if you’re disciplined and strategic. However, the high interest rates and risk of debt make it crucial to plan carefully.

By choosing the right card, sticking to a budget, and paying bills in full, you can enjoy the benefits of credit cards without falling into a debt trap.