Finance savvy couple

Wedding Finance 101: Big Spending? Cash is King? Nah, Credit Card is the real heir to the Iron Throne.

For many of us between the age of 25-30, wedding expenses will be the biggest chunk of our spend at this stage of life. Some people may be proud that they have enough cash to pay off, but in fact, that’s not a very smart thing to do. Even if your wedding banquet venue allows you to pay off the bill at the end of the banquet, DO NOT – I repeat DO NOT pay using your Ang Bao’s cash.

So what’s the reason behind it? It is simple because banks offer 1) Cash Rebates or 2) Airline Miles accumulation with their credit cards.

Bear with us – we know this post can be a little heavy, but you’ll know it’s worth it when you have a “free” return trip to US for your honeymoon just by making your money work with you in the steps below!

just married Image Credits: Getty Images

  1. Which to choose: Cash rebates vs. Miles (points) accumulation?

Well, there are obviously many schools of thought on which is better, but let me lay out the facts here:

On average, cash rebates only offer up to 6% (mostly 2-3%) of rebates and miles/points on average is at 8% (range of 3-10% depending on which class of ticket you claim). As a matter of fact, banks are extremely stingy in giving back cash and you’ll find you need to comb through numerous fine prints for minimum spend or maximum per transaction. Accumulating miles with big ticket spend is more bang for your buck!

Another reason to opt for miles’ reward vs cash rebate is simply because most couples will definitely utilize it when they go on honey moon.

Furthermore, assuming that you are – like us – new to travel hacking, there are plenty of bonuses for the first timers’ miles’ accumulation, and you can easily maximize these bonuses with your large expenses for the wedding. This makes it more likely for you to get more than the average 8% rebate.

Having laid it out like this, my choice was simple – go for Miles Accumulation with our Wedding Spend. With all the sign-up bonuses available now, it would save us a ton for the honeymoon!

  1. Travel-hacking to 1st Class/Business Class flight to Europe/US/JP for Honeymoon

venice Image Credits: Trip Hobo

As I am getting married in March, 2017, I will use myself as an illustration. Here is the breakdown of the cost I have for my wedding preparation:

expense pix2As you can see from the table, my current planned spending for wedding is roughly about $50,800. For the sake of illustrating this point, let’s assume most of this can be paid with credit card. So how do I plan to hack my way into 2 return tickets to Europe or US?

  • Break this up into 2 spending phases

I am splitting my spending into 2 phases, Mar’16 to Oct’16 belongs to myself ($23,500), and Dec’16 to Feb’17 belongs to my fiancé ($27,300). This is to ensure that we do not need to clear the bonuses together which will add pressure on our cash flow or a misstep will cause us to lose the bonus. Reason being – there are a lot of credit cards which award you bonuses only if you complete the spending within a fixed period, such as within the first 6 months of getting the card, ie American Express Ascend Card. Of course, you can easily re=apply this if you are a couple with big spends on your first home.

  • Maximize sign-up bonuses

Research on the best credit card sign-ups and keep yourself updated with the latest promotions via Money Line.

  • Pro – tip for couples

In order to reduce disputes on who ends up paying for which big ticket items, we recommend keeping a joint account with equal contributions each month. With an additional layer of check from your better half, this would ensure that you save as promised, and not have to stress out over debates on who to pay for which item.

  1. Simplicity trumps – Just 2 cards you need to get a trip to US/Europe/Japan

japan Image Credits: Travel Triangle

I like simplicity, and I am not going to go into details as credit card offers are always evolving. I will recommend the fastest way on what’s the best you can do at this point, as a quick start.

Here we go on sign-up bonuses:

  1. DBS Altitude Visa Card – 8,000 miles with $1,000 min. spend for 2 months (12% rebate)
  2. DBS Altitude AMEX Card – 3,000 miles with $800 min. spend in 1st month (11.25% rebate)
  3. American Express Ascend Card – 10,000 miles if you spend $1,000 min. in first 6 months (30% rebate, but wait 6 months)
  4. ANZ Travel Card – 2,000 miles if you spend $500 in 1st month (12% rebate)
  5. Citibank PremierMiles Visa – 42,000 miles if you spend $10,000 in first 3 months (2 criteria – 1) non-Citibank card holder, 2) pay $192.60 annual fee) [10.6% rebate after deducting annual fee)

Total miles earned in 6 months – 71,220 miles with a projected $14.3k spent

  Spend Miles Base
DBS Altitude Visa 2000 8000 2400
DBS Altitude AMEX 800 3000 1920
AMEX ascend 1000 10000 1200
ANZ travel 500 2000 700
Citibank Premiermiles 10000 42000 0
       
       
    Total Miles 71220
    Total Spend 14300

This includes the sign up bonuses and the base miles you will obtain. With another $10K of expenses to go within the allowed time frame, I am on track to achieve a whopping 127,000 miles required for a business class return ticket to US. Repeat steps 1 – 3 with your fiancé and you are good to go on a round trip business class flight to US for your honeymoon! FYI, I am currently at about 55,000 miles (33% done) with only $8,300 of expenditures. Do note though, there will be transfer fees incurred here to cash in the miles so do make sure to take that into account.

Hang on Zack, so where are the 2 cards you mentioned? After all, the above sign-up bonuses are only short term solutions  to fund your honeymoon, and the true 2 cards that I advocate for long term miles accumulation benefits are below:

  1. UOB Privy Miles – Dining (12%), Paywave (12%), General Spend (4.2%)
  2. DBS Women’s World – Online Shopping (12%)

Do only sign up for these 2 cards when you have exhausted all other sign-up bonuses above 10% rebate.

honeymoon Image Credits: New Years Eve Blog

Travel hacking is never an easy task, this post is meant to pique your interest to kick-start your journey to maximize your spending and make your money work for you. So what if our generation has an average $4,000 unsecured loan in credit card per the latest study? We are here to hack our way to US/Europe/Japan.

Important point to note: We always make sure to use credit cards as a way to maximize our spending, so we will always pay off all credit card bills promptly and never use credit cards as a means of spending money we don’t have.

By: Zack

*I am using rebate % so this is more intuitive for the layman; most banks use miles per dollar spent, and I am assuming miles are worth 3c each.

Stay tuned for Part Two on Travel Hacking with your Wedding Expenses, for more tips & tricks!

4 thoughts on “Wedding Finance 101: Big Spending? Cash is King? Nah, Credit Card is the real heir to the Iron Throne.

  1. Dear Zack,

    This is a really well informative article. Thanks for the tips! My wedding will be coming soon too so it is very useful when I am paying the big amount items.

    I have a query though, how did you get 127,000 miles from 71,220 miles? I am lost when you mention: “With another $10K of expenses to go within the allowed time frame, I am on track to achieve a whopping 127,000 miles required for a business class return ticket to US. Repeat steps 1 – 3 with your fiancé and you are good to go on a round trip business class flight to US for your honeymoon!”
    If you could, please explain to me in detail which cards did you use to get 127,000 miles from 71,220 miles.

    Thank you!

    Best Regards,
    Ziyang

    1. Hi Ziyang,

      Thanks for writing in and we are happy to help you out.

      Following the above will indeed get your 71,220 miles, and i have just accomplished this today at 81,200 miles.

      Till date, I have cleared only 3 bonuses, namely DBS Altitude Visa/Amex (20K miles), Travel ANZ (5k miles) and KrisFlyer AMEX ASCEND card (56k miles). My situation above is slightly different as the bonuses were different back when I signed up in March.

      With the rest of the 10k expenses, i am intending to sign up for Citibank Premier miles which will entitle myself to another 42k miles. That would add up to 123k miles.

      Bonuses change every now and then and it is really a timing issue, but hold up on signing up new cards until you clear the bonuses above. You never know there’ll be more coming up in the future!

      Our post is really for you to have the inspiration to maximize your miles gain via sign up and using the right card to spend.

      Also, watch our space again and we will have an update on an interview with a renowned travel hacker to give us more perspective on the above.

      Zack

      1. Hi Zack!

        Thanks for clarifying. Your post definitely give me a good idea on how to maximize my mile gains.

        Ziyang

  2. Hi, I’m curious as to how you managed to sign up for so many credit cards within a short span of time. Wouldn’t the second or third bank start rejecting your applications (unless you applied for them 4-6 months apart)? Hope you can clarify on this, but I could have missed something you mentioned!

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