Help me hack my wedding finances!

September 23, 2010 7:03 PM

My fiancé and I are getting married next April in Los Angeles and we basically want to maximize the use of our available credit.

We've budgeted appropriately and we feel our wedding, which will be modest (50-60 guests) will cost about $16,000. I've saved up enough money to cover this entire cost in cash, but my idea was to put as much as I can on a single or several credit cards and maximize the rewards - be it airline miles, cash back or in point-purchasable items.

Airline miles would be ideal, as we're planning to go to Europe next August to visit my fiancé's extended family who live in Poland and will, most likely, not be able to attend our wedding in Los Angeles.

In terms of my financial history, at the risk of sounding arrogant, it's more or less immaculate. I'm 28, I've only ever owned 1 credit card and I've never made a late payment on it in 8 years. Its got a credit limit of $26,000. I own a home and have never missed a mortgage payment and I have a car which originally was attached to a 5 year loan that I paid off in 4 years. I haven't checked my FICO score, but I'd imagine I'm pretty close to the 800 or so. I also have a fairly steady income.

I've skimmed through blogs like Eventual Millionaire, Get Rich Slowly, Make Love Not Debt and I Will Teach You to Be Rich and often times they have articles about high point yielding credit cards, but that information goes out of date so quickly its hard to keep up with whats the best deal out there.

Also, has anyone had any experience with www.frequentflyermaster.com ? My concern with this program, and many programs similar to it, is that opening several credit cards in such a short span of time with negatively affect my FICO score. Any words of wisdom, links, general anecdotes would be much appreciated!

posted by AsRuinsAreToRome to work & money (7 answers total)

For the places you make large purchases at you might ask if you can get a discount for paying in cash. I imagine since points, miles, and cash back are sort of kickbacks from the credit card processors, you have the potential to do even better by cutting out the middleman.
posted by Several Unnamed Sources at 7:49 PM on September 23, 2010

If you want to churn cards, you should check out Fat Wallet, Flyertalk, and the Frugal Travel Guy. The latter, especially, will help you do what the link above will do for free, and probably better/easier.

Fat Wallet often has threads about churning cards as does Flyertalk. But Frugal Travel Guy is still pretty much helping people out for the love of free travel. He can specifically speak with lots of evidence towards its impact on your score. If you write to him with what you're trying to do, he'll be glad to advise, he'll get a story out of it, and you'll get free help.
posted by micawber at 9:13 PM on September 23, 2010 [3 favorites]

I don't have any experience with these travel and finance gurus you mention but I've been accruing miles since the mid-1980s or so and I'm guessing you're wildly overestimating what you might be able to get out of this.

Using airlines miles as an example, something like a mile for every dollar you spend is pretty common. For arguments sake, let's say you are able to put the entirety of the $16,000 on a card that somehow gives you triple that amount. You'd end up with 48,000 miles which, if you're lucky, will probably get you a single one-way ticket to Europe that may or may not be going to wherever in Poland you're headed. And that's if you're lucky.

So like I said, others may know more about this, but at a glance this seems like it might be more trouble than its worth. $16,000 is not likely to get you that many benefits.
posted by dhammond at 10:15 PM on September 23, 2010

Expanding on what dhammond said, $16,000 would get me 12 movie tickets on my rewards card. Or about a $200 gift card. I'm sure mine's not the best rewards card out there by far (and sure, sometimes they do double rewards), but that's just for some ballpark figuring.

I think you'd reap the maximum from rewards cards if you also put all your monthly purchases on the card and paid it off in full every month. You seem like the type who could pull that off.
posted by kpht at 5:01 AM on September 24, 2010

I am unaware of any card that pays more than a 5% incentive, of any sort. Most are in the 1-3% range. That's a maximum of $800 on a $16,000 bill, but quite possibly more like $320. Not exactly chump change, but not exactly an all-expenses trip anywhere either. It may not actually be worth the hassle.

Something to remember: applying for a bunch of credit cards all at once will hurt your credit score for a while. Not as long as a default or bankruptcy, but if you're planning on any major purchases in the next year or two, this is probably a bad idea.
posted by valkyryn at 6:01 AM on September 24, 2010 [1 favorite]

Seconding Several Unnamed Sources: you can probably get much, much better deals by saying "I'm going to put this on a credit card, but I'll pay in cash if you give me (discount)." Be sure to jack it up 1 or 2 % in case they turn it into a negotiation ("6%? Bah! 1% discount!"). If they refuse to give you a sufficient discount, break out the card and get the rewards anyway.

IANA accountant, but an aside: I did a quick-and-dirty calculation on the value of credit card frequent flier miles vs. cashback, and my numbers say they value is about equal. So I always take cashback since it's liquid - I can always just buy the regular tickets with the cash, but I can't easily turn miles into cash. Of course, some people prefer to save up miles and hotel points and take big, international trips, and that's great for them. But if you're talking about maximizing value, IMO cashback is the way to go.
posted by Tehhund at 6:25 AM on September 24, 2010 [1 favorite]

Expanding on what dhammond said, $16,000 would get me 12 movie tickets on my rewards card. Or about a $200 gift card. I'm sure mine's not the best rewards card out there by far (and sure, sometimes they do double rewards), but that's just for some ballpark figuring.

I get a flat 2% cash back on all purchases with my main rewards card, so that would be $320 for me. Fat Wallet's credit card thread shows some comparable ones. So yeah as others have said if you can negotiate a discount of more than 2% when paying cash that will save you more money, and since the fees a vendor pays on credit card transactions are higher than 2% that will end up being a decent deal for them as well. Otherwise around $300 is as much as you can expect, but that's still decent money and if you get a good rewards card now you will save even more if you keep using it in the future.

Something to remember: applying for a bunch of credit cards all at once will hurt your credit score for a while. Not as long as a default or bankruptcy, but if you're planning on any major purchases in the next year or two, this is probably a bad idea.

Applying for any type of credit card or loan results in a hard pull, which will ding your score. But valkyryn is overstating the impact slightly here, hard pulls have a relatively minor impact on your score (less than 5 points per hard pull usually) and the window of time where they are counted against you is relatively small (no impact at all after around six months). Looking at it from the credit card company's perspective, they are trying to measure how likely it is that you are in trouble and taking out a lot of loans to keep yourself afloat, so if you apply for several cards and six months later you are still on time on your payments they know it was probably a false alarm.
posted by burnmp3s at 7:02 AM on September 24, 2010