Back to school shopping can be expensive, especially if your child is starting school for the first time or entering university. Because of this pressure, a lot of families consider credit cards for back-to-school shopping. While there are pros and cons of credit cards for the back-to-school season, it’s important to understand the reality of credit card debt.
With Australian parents spending an average of $600 per student during the back-to-school season, more parents are looking for ways to make ends meet. While every child should feel equipped and prepared for the upcoming school season, you don’t want to go overboard. In this guide, we’ll explore the pros and cons of using credit cards for back-to-school shopping.
Pros of Using Credit Cards
First, why might you consider using a credit card for back-to-school shopping? Though it’s generally not a good idea to rely on credit cards if you don’t have a plan, there are also some perks to this type of payment. While you need to look at the big-picture before deciding if a credit card is right for you, here are some of the pros to this option.
- Rewards: First, there are a lot of reward credit cards that make it possible to earn cashback or points on existing expenses. You can use these to reduce the overall cost of your back-to-school shopping or save for a trip.
- 0% Interest: Many newly opened cards come with special intro offers. These often include 0% APR for the first few months. If you’re making a large purchase for back-to-school (dorm supplies, computer, etc.), you might wish to spread this purchase out without any interest using a 0% APR card.
- Safer: Unfortunately, fraud does happen, especially in the back-to-school season. If you’re worried about the safety of your bank details when shopping online, a credit card can be a more secure way to shop.
As you can see, there are a lot of great, valuable reasons to use credit cards. Though they’re not right in every situation, you could earn big savings by using credit cards smartly.
Cons of Using Credit Cards
Next, what are the cons of using credit cards for back-to-school shopping? While it’s true credit cards can be a great tool when used responsibly, they can be a slippery slope. This can lead to issues down the line if you’re not careful, so pay close attention to these cons below.
- Debt: The biggest con of using a credit card is that it gets you into the habit of carrying debt. While all debt isn’t created equal, you don’t want to get into more debt than you can afford to repay.
- Overspending: Because it’s easy to swipe a credit card without thinking about the repercussions, credit cards can lead to overspending. If you’re sticking to a budget, it might be better to pay with debit or cash.
- Credit score: If you get into too much credit card debt, this can have an impact on your credit rating. This is an important rating used to access more lines of credit in the future, and it plays a large role in your financial wellness.
Ultimately, it’s up to you to determine if using a credit card to pay for the back-to-school season is the right choice. There is no right or wrong answer, but it’s important to have a plan in place.
Tips to Prepare for the Back-to-School Season
The best way to be ready for the expense of back-to-school season is to start preparing early. Since this is something that happens yearly, it’s possible to take action early to avoid the sudden rush before school begins again.
Take inventory of what you have.
Before you begin shopping, check your home inventory to see what things you already have. Odds are you have plenty of unused supplies at home already, and this means you don’t need to purchase as much brand new. Similarly, check your child’s supplies from the previous year.
Create a shopping list.
It’s always important to have a list before starting a new shopping season. Write down your child’s must-haves, prioritising the most essential things. Some schools provide a shopping list, so this can always be a great resource.
Invest in quality.
While it’s tempting to buy things at an affordable price, consider quality above all. For instance, a high-quality backpack lasts multiple years, while a cheap one might need to be replaced frequently. If you invest in quality, you’ll likely save bigger long-term.
Look for sales.
Lastly, don’t be afraid to use discounts, coupons, and other tricks to save money. If you can wait, you can save even more by shopping after the initial back-to-school season. Even if you can’t use these things this year, you’ll likely need them in the future.
Are You Ready for Back-to-School?
The back to school season can be intimidating, especially if your budget isn’t prepared. While you might choose to use a credit card, make sure you’re prepared to pay it off on time. Similarly, the more preparation you can do in advance, the better equipped your budget will be.
Are you struggling to create a clear budget for this back-to-school season? If so, you’re not alone. Talking to a financial expert makes it easy to create a plan not only for this season but also for the future. Contact our team today on 1300 368 322 to get started. We’re here for you.