Paying for wedding: use savings or build credit score?

smithtobe

Hi,

I'm getting married in just over 2 weeks. We are giving final numbers tonight, but going off our budget we have more than enough saved to cover all of the costs.

We are hoping to buy a house next year as we are renting at the moment. Neither of us have a credit card or any loans (apart from my student loan), so our credit score is built off direct debit payments alone. We both are classed as 970+ on Experian (i.e v good credit score) but I'm a little concerned that we've got no borrowing history.

Is it worth getting a credit card to pay for the wedding, and using savings to pay this back quickly so we have proof for when it comes round to a mortgage that we can meet repayments? Or should we just use our savings and hope for the best when we start house hunting?

[This is my first time posting and is a genuine question, please don't think I'm being daft!]

Thank you x

JasX

smithtobe wrote: »

Hi,
We both are classed as 970+ on Experian (i.e v good credit score) but I'm a little concerned that we've got no borrowing history.

This is a meaningless number, best to ignore it.

There is no point paying interest when you have sufficient savings to cover the expense.

If you're spending 'actual' money it'll probably help you think a bit more about what you're spending

Prioritise rebuilding your savings / future house deposit as fast as possible afterwards which you'll be able to do faster if you're not wasting money on interest

No brainer really -you'll be in a better position to buy a house *not* having a mass of credit card debt around your neck (particularly as not having credit cards is by far the best and most secure way to prevent spending on them getting 'carried away')

if you're really worried go see a mortgage broker and check what kind of mortgage you'd be offered in principle currently (doing this once when you don't intend to buy for 6+ months will do you no harm)

benjus

What credit products do you have at the moment? (i.e. what is on your Experian/Equifax/Callcredit report?) Lack of credit history can be an issue when applying for a mortgage, so it's possible that getting a credit card could help. However, don't use it to borrow money - pay it off in full each month. Don't use it for cash withdrawals. If you think you might struggle with this discipline it's best not to get one at all.

Don't forget that there are other advantages to using credit cards to pay for things: e.g. Section 75 protection and the fact that if the card is used fraudulently you won't be out of pocket while the bank sorts it out.

Person_one

If you can get a 0% purchases card it might be worth considering putting a portion of the bill on one. You should then work out how much you need to pay each month to clear the balance before the 0% deal ends and then set up a direct debit for that amount. You probably wouldn't get offered a very high limit for your first card anyway though.

Mortgage lenders do like to see a history of making credit payments on time, but they also take outstanding cc debts into account when calculating affordability, so you'll have to weigh up what's right for you. Try putting some hypothetical numbers into the affordability calculators on a few lenders websites and see what you get. Nationwide's is straightforward to use.

You have to be disciplined though! Don't be tempted to touch those savings, or see the credit card as free money. That way madness lies!

duchy

It'd be crazy to pay interest but both getting creditcards and using them for your monthly expenditure - food, petrol etc and paying them off each month is going to have exactly the same end result with no interest to pay.

You could use some kind of reward creditcard either with cashback or even one that earns you airline points to pay for a holiday away after the stresses of buying a new home

enthusiasticsaver

I would get credit cards but do as someone else suggested and get 0% and pay it off over a period of time before the 0% deal ends and stick your wedding savings in 3,4 and 5% interest bearing current accounts. This means that when you apply for a mortgage having and being able to repay a credit card will show as a positive on your application and you gain 6 months or whatever interest on the amount saved in the current accounts. Get a reward credit card and you do even better. Just don't be tempted to use the wedding savings to do something else though and make sure it is all repaid by the time you apply for a mortgage. Best thing to do after that is use credit cards for everyday spend and pay off in full every month.

Emma_Larue

Hello,


I got married last year and also had enough money saved up to pay for everything. However certain things we paid for with credit cards and then paid them straight off so we didn't pay any interest. I am so glad we did that as I had a total nightmare with my Rime Arodaky wedding dress from The Mews of Notting Hill. Long story but after the shop owner Gail Crispin refused to help me, offer any refund or even an apology for almost ruining my wedding day I took it up with Lloyds TSB under a Section 75claim which was upheld. I am now getting a full refund for the £2565 dress that The Mews of Notting Hill ruined. If I hadn't paid with a credit card I would have had no come back at all. Also you only have to pay the deposit to be covered.


Hope this helps! Congratulations on your upcoming wedding!

gingercordial

Yes, using a credit card would give you better protection on your purchases, which we all know can be big for a wedding!

A 0% on purchases card would be great if you can get one, just make sure you set up a direct debit for the minimum payment so you don't miss one and cause a black mark on your file. Then either make overpayments to clear it within the period or put that money away to earn interest if you are SURE you won't touch it. Take a good note of the end of the 0% period and be sure to clear the card before then.

caprikid1

I personally would forget 0% Cards and get a cashback card if one exists still ? Use it and pay it off every month, you then will get 05 - 1% back on the cost of your wedding ?

sweetilemon

As long as the company don't charge for credit cards, you can put it on your card then pay it off in full when you get the statement. Saves paying interest but means you can help your credit score.

sweetilemon

caprikid1 wrote: »

I personally would forget 0% Cards and get a cashback card if one exists still ? Use it and pay it off every month, you then will get 05 - 1% back on the cost of your wedding ?

I agree, a cashback card is the way to go. Just don't forget to pay off in full!