Home > 2015 > Personal Finance

Did You Make One of These 7 Back-to-School Shopping Mistakes?

Advertiser Disclosure Comments 2 Comments

As kids across the country embark on that saddest of journeys back to school after a summer of fun, wondering where all the time went, many parents may be having a similar reaction to the frenzy of back-to-school shopping and where their money went.

While getting a child equipped for school is never a cheap date, for families who have a limited budget (or no budget at all) this time of year can be stressful, especially with a series of expensive holidays on the horizon.

Here are seven common back-to-school shopping mistakes you may have made this year, and some help for avoiding these pitfalls next year.

1. You Didn’t Work Out a Budget Beforehand

If you had a problem with cash flow, one of the biggest mistakes you could have made was to wade into the back-to-school swamp without a budget. Like the dreaded ad lib speech on the presidential campaign trail, stream of consciousness shopping is never a good idea. Before you set out, determine your financial threshold for pain, and don’t stray from the school’s list of requisite supplies.

Unless it’s absolutely necessary (or a family bonding exercise), consider shopping without your kids. You can browse together online before you hit the pavement (or the Internet version thereof). Self-expression is a wonderful thing, but you may be pressured into overspending if they’re with you and insist on “needing” things that aren’t on your list.

2. You Used the Wrong Credit Card

If you count yourself among the millions of Americans who don’t – or can’t – pay off their credit card debt at the end of every month, hopefully you picked your card carefully. Whether you figured out how to use the card with the lowest interest rate or decided you’d rather shoot for the best rewards, if you didn’t take a moment to think about which card could do the most for you (or the least amount of harm), you may be regretting it in the months to come. (Furthermore, if you’re carrying a balance on a rewards card, you’re probably paying more in interest charges than you’re earning back in rewards. It’s something to keep in mind.)

Forgot the exact terms of each of your cards? You’re not alone, but you’re not out of luck, either. They’re posted online and it’s very much worth checking the fine print before your statement comes.

3. You Used Credit When You Had Cash

The amount of your available credit that you’re using makes up about 30% of your total FICO score. If you’re carrying a balance, keeping it at no more than 30% of your available credit — though 10% or less is even better – is a good way to maximize that factor in your credit score. If you are pushing the limits of your available credit, you might want to consider paying cash instead.

A good rule of thumb: If you don’t have the cash, pretend that’s what you are using. It will curb your spending. Be a smart shopper. The last thing you want to do, when you’re approaching the end of your credit runway, is add more debt.

If you decide to use a credit or debit card, decide exactly how much you want to spend, and stick to it. The same thing applies to budgets as to diets: It’s the sips and nibbles that get you in the end. Discipline should be your watchword.

4. You Missed a Chance to Earn More Rewards

You could have all the available credit in the world and yet still you messed up because you chose a lousy rewards program. When it comes to this, not all credit cards are great, or even good.

Your credit card company may offer quarterly rewards deals, but you still have to take advantage of them—and the first step is most often reading your offers. Doubtless you get a whole lot of promotional mail, but it’s worth actually looking at some of it. In addition to a discount, reading correspondence from your credit card company – in this case, your statements – can be the Paul Revere moment for various kinds of fraud, something I explain in my forthcoming book, Swiped.

What do these offers look like? Some back-to-school rewards programs might offer savings on school supplies or kids’ clothing.

Always shop around, because “your mileage” may vary and there are often great deals out there.

5. You Applied for a Store Credit Card You Won’t Use

The 5-10% discount that most retailers used to lure you into signing up for their credit card might have been too good to be true, or rather, it was nowhere near enough of a discount to offset the higher-than-average interest rates they often carry. Store credit cards can be used wisely to get good discounts, but if you won’t be returning to the store often, you may not be able to use them.

Additionally, you may have dinged your credit score if you applied for too many cards on your back-to-school journey. If you’re not sure how many inquiries are on your report, you can get a free credit report summary from Credit.com. It can show you that and a whole lot more, including your credit scores and a breakdown of the information on your credit report, in a consumer-friendly way.

An added warning: It can be quite easy to miss a store credit card bill since you aren’t using it often. Make sure you keep an eye out for any bills, since missing a payment can drop your credit score significantly.

6. You Took Out a Payday Loan

Payday loans come with average annual interest rates that can top 400%, according to the Center for Responsible Lending the Center for Responsible Lending. However, there are often alternatives that can be less pricey – but you have to do your research. Many studies have shown that payday loans can lead to repeat borrowing — creating a financial hamster wheel of sorts that often ends with the hamster (that would be you) both fiscally exhausted and facing a much bigger debt than originally anticipated.

Next time around, if you know you won’t have the cash to cover the back-to-school necessities, consider shopping around for a personal loan as an alternative.

7. You Shopped Hungry, Tired or Without Enough Time

While it may not seem like personal finance advice, (dare I sound like your mother) you should eat something before you go shopping. If you’re hungry, you’re distracted. If you’re distracted, you’re more likely to let your budget slide, or give in to the pleas of a whining child. It’s always best to find a time to shop when you feel well-rested and unrushed.

If you made any of the above mistakes, it’s not the end of the world. Building good credit is all about progress, not perfection. Hey, there’s always next year.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

More Money-Saving Reads:

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • Owen Abbott

    I don’t have a credit card. Why I need one? it makes me spend money over my affordable amount. I use me debit card for everything like Amazon, Macgo Blu-ray Player , Apple apps etc. and other online payments, swipe cards at stores directly.

    • http://www.credit.com/ Credit.com Credit Experts

      If you overspend with a credit card, you may be wise to forgo having one. They can help you build credit, but it is also possible to build credit without them. Here’s more:
      7 Ways to Build Credit Without a Credit Card

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team