A recent report found that August has become a prime month for consumers taking on extra credit card debt, and back-to-school shopping is the likely culprit.
Many back-to-school ads feature items beyond the traditional supplies and clothes.
Planning your purchases in advance can help shoppers compare prices and save the most money.
While retailers like Target have been sharing back-to-school sales for weeks, the new school year rush is officially in full effect.
That also means it’s time to stock up on supplies, clothes, shoes, and more.
However, do all these purchases also mean your credit card bills are stacking up?
A recent report from CardRatings.com found that August is becoming a big month of credit card debt for consumers, and back-to-school shopping is likely to blame.
Richard Barrington, a finance expert at CardRatings, broke down what exactly this means for consumers, including how to save money and how to prepare for this extra expense.
Is inflation to blame?
According to Barrington, it could play a role.
Certainly, inflation has been an issue in recent years, and has perked up again recently,” he told ConsumerAffairs. “So, one factor here is that items are getting more expensive.
“However, overspending comes into play when you look at the scope of what’s considered ‘back-to-school’ shopping. A quick look at ads for back-to-school sales revealed that alongside the usual pens, pads, and clothing, such items as kids’ headphones, water bottles, and make-up items are featured. Even air fryers were included in back-to-school advertising – ostensibly for dorm rooms, though they are actually banned by many schools for safety reasons.
“So, the definition of ‘back-to-school’ shopping has expanded over the years, increasing the potential for overspending.”
Credit card debt climbs in August
Barrington explained that the company’s report highlighted some recent trends related to extra credit card debt.
“Historically, August has been an above-average month for consumers taking on credit card debt,” he said. “This trend has held in recent years. Over the past four years, consumers have taken on an average of 75% more credit card debt than in the average month.
“While not all of this can be attributed to back-to-school shopping, when you think about what makes August different from other months, back-to-school shopping features prominently.”
Money-saving tips
While no one wants to incur more debt, there are ways to save on back-to-school shopping, and Barrington says that preparation is key.
“Do some research in advance,” he said. “Whether you shop online or in person, doing price comparisons online can help you separate genuine sales from hype. Then you can use that research to set a budget to keep your back-to-school spending in line.
“Consider back-to-school shopping a teaching opportunity. Educate your kids on the importance of staying on-budget and not getting sucked into sales hype. Then have them participate in the process of searching out the best prices and sticking to the plan when you shop.”