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The excitement of summer’s leisurely days is slowly giving way to the approaching back-to-school season. As families prepare for the flurry of school supplies, clothing, and other essentials, a concerning trend has emerged: a surge in credit card debt. If you’re stressed about paying for these items for your kids, check out the best credit cards for your shopping spree.
What the numbers are saying
A survey by CNET Money delved into the financial habits of back-to-school shoppers and revealed that 43% of them are turning to some form of financing to cover their supply costs this year. Among these consumers, 27% are relying on their existing credit cards, while an additional 12% are taking the plunge and opening new credit card accounts. This shift towards credit card usage highlights a growing reliance on borrowed money to navigate the costs of the back-to-school season.
Interestingly, this financial strain has prompted 86% of respondents to adopt at least one money-saving strategy to alleviate the pressure of back-to-school shopping. Leading the pack is the classic tactic of “Seeking out coupons, sales, and discounts,” chosen by 39% of consumers. Following closely behind are strategies like price comparison, buying fewer items, and opting for more affordable brands.
For parents of college-bound children, the pressure to afford higher education expenses is equally daunting. A significant portion, nearly three in 10, stated their intention to harness credit card rewards to offset these costs. This tactic showcases a shift towards leveraging credit cards as financial tools rather than as a means of convenience. Additionally, one in 10 respondents plan to use “Buy Now, Pay Later” programs, which raises concerns about future debt accumulation. Alarmingly, another one in 10 respondents admitted they are considering tapping into savings accounts not initially intended for educational expenses – including retirement accounts – to bridge the financial gap.
The specter of inflation and rising consumer costs is casting a shadow over back-to-school shopping plans. A staggering 85% of respondents acknowledged that these economic factors would impact their spending decisions somehow. This apprehension points to a more considerable concern: rising prices will continue eroding consumers’ financial stability, potentially leading to even more reliance on credit cards as a coping mechanism.
The undeniable truth is that the back-to-school shopping season has evolved into one of the most significant spending periods of the year. According to a comprehensive report from Statista, a data analytics company, the anticipated average back-to-school expenditure per household in 2023 is a staggering $890.07. This figure marks a nearly 3% increase from the previous year and a staggering 27.7% uptick since 2019. The juxtaposition of escalating school supply costs and stagnant wages has left many parents feeling financially stretched, and the accessibility of credit cards appears to be both a solution and a trap.
Bottom line
The surge in credit card usage and increasing reliance on alternative financial strategies raises concerns about mounting debt and financial instability. As parents and students gear up for the academic year ahead, it’s crucial to approach back-to-school shopping with a measured and strategic financial plan that safeguards against the pitfalls of credit card debt. After all, the true lessons learned in school should extend to wise financial choices that set families up for a secure and stable future.
