American families are drowning in back-to-school expenses as inflation continues to weigh on household budgets, according to a survey from financial services company Bankrate published Monday.
Around 31% of back-to-school shoppers will, or already have, taken on debt to afford school supplies, clothing and other back-to-school necessities, the survey of 2,300 adults conducted by Bankrate between July 15 and 17 found. Of those taking on debt, nearly 1 in 4 shoppers will incur credit card debt, while around 1 in 8 shoppers will utilize buy now, pay later schemes that involve purchasing an item through a series of installments.
“I don’t understand how people are living right now,” Isabella Canales, a 29-year-old living in suburban Dallas, told Bankrate. “When you look at the amount that you have to pay for these uniforms and all that stuff, it’s crazy.”
The back-to-school shopping season is here
According to a recent Bankrate report, nearly one-third (31%) of shoppers say buying supplies for the new school year will push them into debt. The survey polled over 2,300 adults in July.
Back to school shopping is more expensive pic.twitter.com/sqMGJ1nJyO
— Bad Trader (@BadTraderApp) August 19, 2024
While year-over-year inflation has recently fallen below 3% year-over-year for the first time since 2021, the rate remains well above the Federal Reserve’s target of 2% and more than double the 1.4% rate from when President Joe Biden first took office.
Despite the decline in the rate of inflation, some school supplies have skyrocketed in price, with the cost of luggage including backpacks rising 15.6% between June 2023 and June 2024, according to CNBC. The percentage of shoppers who said inflation has changed or will change their buying habits in 2024 was 32%, down from 41% in 2022, Bankrate’s survey showed.
The high rate of Americans taking on debt in order to purchase school supplies follows a steep decline in the personal savings rate from 32% in April 2020 to 3.4% in June 2024, according to the Federal Reserve Bank of St. Louis (FRED). Meanwhile, nearly half of back-to-school shoppers have implemented “money-saving strategies,” such as 22% of shoppers keeping money set aside to afford school supplies this fall, Bankrate reported.
The cumulative amount of credit card debt held by all Americans stands at an all-time high of $1.06 trillion as of August 7, according to FRED.
“It’s important not to let your guard down,” Bankrate Senior Industry Analyst Ted Rossman said. “Credit card rates and balances remain near record highs and there’s a cumulative toll to all of the price increases we’ve seen the past few years.”
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