Paying for the big white (and costly) wedding
- The big white wedding is costly, and couples regret some of their expenditures.
- Wedding costs present the financial industry with an opportunity to enable access to credit.
Walking down the aisle costs money, and American couples spend upwards of $30,000 on their big day. Wedding costs are dependent not only on the grandeur of the nuptials but also on the location. Hawaii, California, and the New York metro areas are some of the most expensive places for hosting the event in the US. We take a look at wedding expenses, and the role the financial industry plays in this big day.
Put it on the card: Ringing the wedding bells comes with a lot of emotions, and some of these emotions have to do with money. 20% of respondents thought that their wedding was unnecessarily expensive, according to a new survey. To fund their special day, 33% of men took out a loan or paid with their credit card, compared to 20% of women who did the same.
Money regrets: 38% of men regret wedding finances and wish they had spent less on venues, decor and the photographer, compared to 29% of women. But money weighs heavily on the guests, too, as couples worry about whether their guests could afford attendance.
Lending opportunity: If consumers are waiting to save for a wedding, they will be waiting a long time – couples have to save for six years to afford the cheapest of weddings. That’s why consumers turn towards lending and credit options, an opportunity that has not gone unrecognized by fintechs. For example, SoFI offers wedding and honeymoon financing through a personal loan that comes with no fees at an 8.99% APR to 25.81% APR. LendingPoint and Upgrade offer similar loans to consumers looking to tie the knot.
As online lenders move into the space, BNPL providers aren't too far behind. For example, Affirm has multiple retailers in the wedding industry on its network that consumers can use to break up their costs overtime. And Maroo is a payment platform that allows consumers to pay their wedding vendors like photographers, venues, caterers over time. Maroo also integrates with wedding businesses to enable them to offer a greater range of payment options to their customers. Although BNPL may be a convenient option for those that don't have great credit standing or don't want to spend more on fees, paying over time comes with its own pitfalls: BNPL does affect credit score albeit not in quite the same way as credit cards, and loan stacking may open consumers up to financial vulnerability.