This post I'm going to talk about what happens after the wedding and honeymoon . . . wedding debt. If you're lucky, you'll either have somebody else paying for your entire wedding, have saved enough, or are able to pay it off in a timely fashion. But for many, that is not the case and I am very sad to say that it is true for my husband and myself.
As you know, I am a huge proponent of using credit cards by using them wisely (See Make Money With Credit Cards). This means never accruing debt by always spending within your means and paying off the bill each month in full. Obviously this is quite hard to do when paying for a huge expense like a wedding so in my post, Using Credit Cards to Pay For Your Wedding and Honeymoon, I recommended opening a new card or two with a promotional 0% interest period to use to pay for your wedding and then paying off that card within the promotional period (therefor not paying any interest on the charges). Well my year is almost up for the 0% interest on my cards and I am nowhere near to paying it off.
I really had no idea if we would be able to accomplish it. I had really hoped so but with so many variables in my husband to be and my own income as well as moving, I didn't know what our budget to live and how much we would be making each month would be and so how much we could pay off each month. After about 8 months, I know that we can comfortably live off of what we make and still pay a little off our wedding debt, but not enough to pay it off in time.
The safe and frugalness in me wants to be so upset that I didn't accomplish this, but I have to take a different mindset. Honestly a large wedding and honeymoon is a big life purchase and it's okay to be paying it off over several years just like you would for purchasing a house, going to college, etc. I'm very happy with the wedding and honeymoon I had and I wouldn't change it for all the money in the world. And I would be more upset with myself years later if I hadn't gone big.
So now it comes to paying it off. For my first card that came to the end of the 0% promotion period, it didn't have as much value on it. I ended up transferring the balance to another card that was offering a 0% interest on balance transfers promotion (and payed a fee of a little more than $100, still less than interest would be). I figured I could just keep getting new cards that have this offer and transferring the balance. Wrong. Not only at this point was I really messing up my credit score by having cards that were over or at the top of the credit limit, but each time you open a new account it lowers your score. That makes it harder to get the better cards. Plus, when you first get a new card, the credit line is pretty low. I had a HUGE balance on my remaining card.
I realized it would get way too complicated to keep playing this transfer game. I had been getting some things in the mail offering great rates on personal loans. Once I realized this was a huge life expense that was going to take years to pay off, I figured a loan was the best option to consolidate and get the debt off of credit cards!So I started researching personal loans. I found out that peer to peer usually have the best rates since they are funded by people just like you and me and not a big corporation that has thousands of employees to pay. Prosper was said to be one of the best companies. So I applied. I did not qualify (probably from all the credit card debt that I was trying to eliminate!). I tried under my husband. He did not qualify (Most likely because he has like no credit history. We're going to work on that). But they did point him to a different company that offered him a loan for just above the amount we needed to pay off the card in question.
I was filling out all the appropriate fields to accept the offer when it dawned on me, "What is the APR for the credit card once the promotional period ends?" I went and checked and lo and behold, that rate was lower than the loan rate. WAY lower. I know credit card rates fluctuate but I thought at least for now, we might as well wait and just keep it on the card!
So the moral of the story is, pay off your debt within the period if you can but if you can't, just keeping it on the card might be the best option!
