Survey: 31% of back-to-school shoppers will take on debt to fund their spending this year

Isabella Canales, a 29-year-old living in suburban Dallas, has been deeply stressed about money this year. Though she and her husband have a household income of nearly $9,000 per month pre-tax, their budget is nearly completely eaten up by expensive living expenses and paying back around $57,000 of medical debt and consumer debt.

The last thing she needed was another huge expense. Unfortunately, the high cost of the back-to-school season has left her even further in debt.

In July, Canales spent nearly $1,000 on supplies and clothing for her two oldest daughters, who are going into second and third grade at a local charter school. That’s $200 more than she spent last year. And that’s not all — she also received a long school supplies list from her 2-year-old’s daycare, asking her to purchase items such as index cards, cardstock paper, Lysol wipes, paint, watercolors, pencil bags, highlighters, paintbrushes and a painting apron.

“I don’t understand how people are living right now,” Canales says. “When you look at the amount that you have to pay for these uniforms and all that stuff, it’s crazy.”

As the beginning of the 2024-2025 school year approaches, many households are struggling to afford books, clothes and school supplies. For some, that struggle is leading to carrying debt.

Nearly one-third (31 percent) of U.S. adults doing back-to-school shopping this year are going into debt to pay for it (or already have), according to Bankrate’s newest Back to School Survey.

That includes 24 percent of people who are using/plan to use credit cards and paying the balance over time and 13 percent who are using/plan to use buy now, pay later services. The percentage hasn’t changed much since 2022, the last time Bankrate asked about back-to-school spending, when 29 percent of back-to-school shoppers went into debt.

As parents and students alike try to figure out how to pay for their supplies this fall, this is how people are shopping this back-to-school season.

Bankrate’s insights on back-to-school shopping

Nearly 1 in 4 back-to-school shoppers will take on credit card debt

Nearly half (49 percent) of U.S. adults will go back-to-school shopping this year, with the majority planning to use debit cards and/or cash.

Nearly 2 in 3 (65 percent) back-to-school shoppers used/plan to use debit cards, making it the most popular payment option, followed by cash (57 percent). Less popularly, 35 percent of back-to-school shoppers used/plan to use a credit card and pay in full to avoid interest.

Thirty-one percent of back-to-school shoppers have taken on/will take on debt. That includes 24 percent who used/will use credit cards and carry balances over time and 13 percent who used/will use buy now, pay later services:

Source: Bankrate survey, July 15-17, 2024

Note: Percentages are of back-to-school shoppers.

From crayons for elementary schoolers to expensive technology for college kids, families may still be getting sticker shock from the price of school supplies, even if they’re paying less this year. For example, last year, Bankrate Editorial Director Amy Sims was shocked by the price of some supplies, like notebooks. This year’s supplies were a little less expensive.

“We spent about $150 for one child who is entering the 7th grade in the fall,” Sims says. “It wasn’t as expensive as it has been in recent years, but it was still costly. But my daughter isn’t even requiring expensive materials for her education yet. She doesn’t need a computer or anything like that.”

Sims recommends back-to-school shoppers check their credit card rewards this time of the year to make sure they’re using the best card to maximize rewards. For example, she bought her daughter’s school supplies at Walmart because several of her cards offer extra perks there.

46% of back-to-school shoppers are using money-saving strategies

Inflation isn’t impacting as many shoppers as it did in 2022. Only 32 percent of today’s back-to-school shoppers say inflation did/will change their habits, down from 41 percent in 2022.

According to the U.S. Bureau of Labor Statistics (BLS), consumers in 2022 experienced record-high inflation after the annual rate hit 9.1 percent in June of that year. Now, the inflation rate is only 3 percent year-over-year as of June 2024.

However, many shoppers are still trying to make their budgets stretch as far as they can. Nearly one-fourth (22 percent) of back-to-school shoppers this year had/have money set aside or budgeted to spend on school supplies.

Additionally, 18 percent of back-to-school shoppers say the spending did/will strain their budgets (down from 31 percent in 2022) and 14 percent say they did/will feel pressured to spend more than they are comfortable with (down from 26 percent in 2022):

Source: Bankrate survey, July 15-17, 2024

Note: Percentages are of back-to-school shoppers.

Nearly half (46 percent) of back-to-school shoppers are employing strategies to save money this year, like seeking out more deals or coupons than they did in the past (28 percent), buying cheaper brands (21 percent) or buying fewer school supplies than they did in previous years due to the cost (19 percent).

But, just as a smaller percentage of people say inflation will change the way they shop this year, fewer people are thinking about cost-cutting measures than they did two years ago. In 2022, 47 percent of back-to-school shoppers said they were seeking more deals or coupons than they did in the past, 35 percent said they would buy cheaper brands and 36 percent said they would buy fewer school supplies than they did in previous years due to the cost.

“Shoppers aren’t clutching their wallets nearly as tightly this year. It’s important not to let your guard down, though,” Bankrate Senior Industry Analyst Ted Rossman says. “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.”

High credit card rates are affecting Americans like Canales, who was unable to afford paying for supplies out of pocket, in addition to her other high monthly expenses. She ended up financing her children’s back-to-school supplies on a credit card, Target card and by using Affirm, a buy now, pay later platform. She now has to juggle paying back her $1,000 back-to-school expense alongside the rest of her debt repayments.

“I have never been a fan of back-to-school,” Canales says. “We’re just barely making it by as it is.”

The fact that fewer people are feeling financial pressure around back-to-school shopping this year is an encouraging sign that inflation is easing in its effect on Americans’ personal finances, compared to the past several years. Still, for some, this back-to-school season is another reminder that costs of many everyday goods are still just too high to comfortably afford.

3 tips to save money on back-to-school shopping

If you’re looking at your child’s back-to-school shopping list and wondering how you’ll afford it all, you’re not alone. Consider these three tips to make the financial pinch feel a little easier this summer.

1. Check prices ahead of time, and make an informed budget.

Making a budget should be the first step before any big purchase, including back-to-school shopping. To find out how much you should spend this year, take a look at your bank statements — or if you have access to them, receipts — from last year and use that as your baseline.

Then, check the prices of common school supplies at several different stores to find out what items cost today, and make a rough estimate of what you might spend. Knowing prices before you walk into the store can help you avoid sticker shock and will help you budget in advance.

2. Know exactly what you need — and when you need it.

To avoid overspending, review your back-to-school shopping list carefully and decide what you need to buy today and what you can go without.

“Shop back-to-school sales and pay attention to the specifics of your kid’s class. Our daughter’s teacher separated items by necessities and ‘nice-to-haves,’ so we knew what was expected and what were bonus items for her classroom,” Bankrate Writer Andrew Dehan says.

Similarly, check with your school to see what items might be needed later in the year, so you can space out purchases. Many back-to-school items are on sale this time of year and can be bought in bulk. However, for items that would be full price now, like winter clothing or athletic and extracurricular supplies, consider purchasing them later in the year to give your budget some breathing room.

3. Start early, and take advantage of tax holidays.

Many states have local tax holidays on a weekend between July and September, when sales tax is waived on certain items to give parents some relief during the back-to-school season. Check your local tax holiday in your state, because many states only allow specific items to be purchased tax-free and only up to a certain amount. For example, Connecticut’s tax holiday is between August 18 and 24, and it applies to up to $100 of clothing and footwear.

Because these tax holidays can happen as early as July, jump on the chance to shop earlier, rather than later. Sims recommends back-to-school shoppers start as soon as their child’s school supply list is available.

“As we get closer to the start of the school year in our area, supplies become limited, and I’ve found myself in the past buying more expensive items because the cheaper options were sold out,” she says.

• Methodology

  All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,358 adults, of whom 1,163 have shopped or are planning to shop for back-to-school items this year. Fieldwork was undertaken between 15th – 17th July 2024. The figures have been weighted and are representative of all US adults (aged 18+). The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection, followed by a sample matching process and then a weighting scheme on the back end designed and proven to provide nationally representative results.