As wedding season approaches, couples are booking venues, compiling guest lists and hiring a dizzying array of vendors — and digging deep into their pockets to pay for it.
The average U.S. wedding cost $30,000 in 2022, up $2,000 from 2021, according to a study by wedding website The Knot. Although weddings have long been expensive, inflation is pushing costs higher.
Couples can turn to increasingly popular”buy now pay later” payment plans to ease the burden. These plans allow you to split the total cost of the purchase into installments, often with no interest and no fees if you pay on time.
But they have risks, and there may be better ways to finance your wedding.
How buy now pay later works for weddings
Buy now, pay later providers like Affirm, Afterpay and Klarna partner with thousands of merchants, including wedding retailers.
Affirm partners with David’s Bridal, Men’s Wearhouse, Kay Jewelers and Zales, among others, to offer customers its pay later plans. By opting for Affirm when checking in online or in-store, couples can pause payments on a wedding-related purchase at no additional cost, depending on the merchant.
“Wedding planning can really get out of hand, and an option like Affirm helps couples regain that financial control,” says Katrina Holt, senior vice president of operations at Affirm. “It’s a way to pay in small amounts that fits the way couples are used to budgeting.”
Repayment terms for Buy Now Pay Later plans range from quadruple payment, which divides the total cost into four equal payments due every two weeks, to monthly payment plans that extend up to five years.
Getting approved for these plans is often easier than for traditional credit. Applications are short and most providers only perform a light credit check with no minimum credit score requirements.
While providers like Affirm can help couples finance smaller purchases, others focus on big wedding expenses.
Maroo, a payment processing platform with a pay later option, allows couples to pay wedding vendors – think photographers, musicians, caterers, even the venue – over three, six or 12 months.
“If you can buy your Peloton in installments, why shouldn’t you be able to pay off big chunks of your wedding in installments?” says Anja Winikka, co-founder and marketing director at Maroo. “It’s a huge expense, and what happens is that couples run into cash flow problems and throw their wedding bills on high-interest credit cards.”
Maroo charges no interest and, like other providers, only requires a credit check to qualify.
Risks of buy now, pay later for weddings
While these plans can help you split purchases, they tend to encourage overspending, and couples should be careful.
If you’re successfully sticking to a budget but want help managing your monthly cash flow, using a Buy Now Pay Later plan can be a good option, says Natalie Slagle, a Minnesota-based certified financial planner who works with couples.
“What about people who can’t afford a wedding unless they do this? That’s who I don’t think these payment plans are for,” she says.
Slagle urges couples to also think about their wedding in the context of other plans, such as buying a house or having a baby.
“Is this going to be the only hurdle that comes your way financially in the next few years? Because from what I see in my professional experience, it’s not,” says Slagle. “How do you set yourself up for financial success after the wedding?”
The industry also faces federal scrutiny. In September 2022, the Consumer Financial Protection Bureau launched a buy now pay later study which cited inconsistent consumer protection, data security and debt accumulation among its concerns.
A the second studylaunched in March, identified buy-now-pay-later users as more likely to show signs of financial distress compared to non-users.
Other ways to pay for your wedding
The best way to pay for your wedding it’s through savings, says Slagle. Another option is a gift or interest-free loan from a family member.
If you need financing, there are options other than buy now, pay later.
Credit cards can help you earn cash back or points, which can offset other costs like your honeymoon. You’ll want to pay off your balance each month to avoid compounding interest.
Another option is a wedding loan, which is an unsecured personal loan from a bank, credit union, or online lender that covers wedding expenses. These loans charge fixed interest and have predictable monthly payments, but rates can be high depending on your credit score.
This article was written by NerdWallet and was originally published by The Associated Press.
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Jackie Veling writes for NerdWallet. Email: jveling@nerdwallet.com.
