Stop paying interest for new splurges.


By Jenny Hoff, Photo by THEFUNKSHIP

The days of using your credit card on fashion splurges are over…at least, they should be. With the plethora of online thrift shops selling designer fashions, the growth of local designers who focus on sustainability and the popularity of the minimalist movement, there is no reason to put a designer handbag or an expensive shopping haul on a credit card, only to pay it off in increments with a high interest rate tacked on every month.

When consumers think of credit, they often assume that by making the minimum payment required every month, they’re keeping their credit score high while slowly paying off purchases. Credit card rewards are becoming ever more attractive as the post-pandemic travel bug continues to grow, and credit card companies are willing to offer fantastic points-based rewards to new applicants—big enough sign-on bonuses to score a roundtrip flight abroad. If you’ve got excellent credit, these highly attractive credit cards are available to you. However, just because you qualify doesn’t mean you should use them, especially if you can’t afford to pay off the entire balance every month.

Rewards cards come with very high interest rates, upwards of 25%. To break that down, consider you bought a $2,000 handbag and put it on a rewards credit card that happens to charge an average interest rate of 25%. You pay the minimum balance each month of around $80. It would take you 10 years and two months to pay off that purse due to the interest accumulated every month, and the total amount you will have paid after that decade will be $3,926—almost double the original cost of the purse.

If you must indulge in a more expensive purchase, first make sure you qualify for a no-interest credit card, which will allow you to carry a balance for at least 12 months without accumulating interest. You still have to make the minimum payments to keep your credit score healthy, and you’ll definitely want to make sure to pay off your balance before the promotional time is finished, which is when the interest rates—usually high ones—kick in.

Avoid debt, high interest rates and fashion that is already outdated by the time you pay it off. 2024 should be all about opting for high-quality, sustainable, more affordable, preferably gently used fashion that doesn’t drain your bank account. You don’t have to go to thrift stores and spend hours scouring the racks for that one great find. With sites like Poshmark, Rebag and ThredUp, you can have your designer purse and money to put in it, too.

You can also make a true fashion statement and support smaller designers who use better, less toxic products in their clothing, follow more sustainable practices and don’t upcharge for an expensive marketing team.
Be a true fashion maven. Make 2024 the year of out with the new and in with the old. Find fantastic fashion for a fraction of the price, and keep your credit and bank account healthy at the same time.



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