How To Finance Back-to-School Costs

Back-to-school shopping season is already underway, and for many families, the cost of a new school year is adding pressure to an already stretched budget.

According to a U.S. News survey, just 28% of parents said they’d have no trouble affording back-to-school expenses, while most expect the costs to put a strain on their finances. More than half plan to spend between $101 and $300 per child this year.

If you need to borrow to cover school supplies, clothes or other back-to-school essentials, some financing options are far more affordable than others. Here’s how to pay for back-to-school shopping while keeping borrowing costs as low as possible.

If you’re able to pay off your balance in full by the due date, putting your back-to-school purchases on a cash-back credit card can help offset some of the cost. Since you’ll already be spending money on essentials like school supplies, backpacks, clothes and electronics, you might as well earn rewards on those purchases.

The Chase Freedom Unlimited® is a great everyday option, offering at least 1.5% cash back on every purchase, with higher rewards in select spending categories. It’s a simple way to earn rewards without having to think about activating bonus categories or tracking spending limits.

The Citi Double Cash® Card is another strong choice if you want to maximize your rewards with minimal effort. The card earns up to 2% cash back on every purchase: 1% when you make a purchase and another 1% when you pay it off. If you consistently pay your statement balance on time and in full, it’s one of the highest flat-rate cash-back cards available.

While many of the top cash-back cards require good to excellent credit, there are solid options for borrowers with fair credit. The Capital One QuicksilverOne Cash Rewards Credit Card is a standout pick, earning an unlimited 1.5% cash back on every purchase with no rotating bonus categories or caps on rewards. It’s a simple way to earn cash back on your back-to-school spending while you work to build or improve your credit.

If you need to spread out the cost of back-to-school shopping over several months, a 0% APR credit card can be one of the cheapest ways to borrow. These cards let you finance new purchases without paying interest during an introductory period, which typically lasts anywhere from 15 to 21 months, depending on the card.

Just make sure you have a plan to pay off your balance before the introductory period ends. Once it expires, any remaining balance will begin accruing interest at the card’s regular APR, which can be significantly higher.

The no-annual-fee Wells Fargo Reflect® Card is a strong option if your priority is maximizing your interest-free repayment window. It offers one of the longest introductory APR periods on new purchases among widely available cards, giving you nearly two years to pay off eligible back-to-school expenses without interest.

If you’d also like to earn rewards while financing your purchases, consider the Blue Cash Everyday® Card from American Express. In addition to an introductory 0% APR period on new purchases, it earns cash back in everyday spending categories like supermarkets and gas stations. The card also has no annual fee and offers a welcome bonus: Earn a $200 statement credit after spending $2,000 on eligible purchases within the first six months of card membership.

If you have fair credit, limited credit history or are just starting to build credit, Upstart could be worth considering. In addition to your credit profile, the lender may consider factors like your education, employment and income when evaluating your application. You can also apply with a co-borrower to strengthen your chances of approval. Loan amounts range from $1,000 to $75,000 with repayment terms of three or five years.

If you have good to excellent credit, LightStream may offer lower borrowing costs. The online lending division of Truist Bank offers loan terms ranging from two to 20 years, depending on the loan purpose. It also doesn’t charge origination fees, which can help lower your overall borrowing costs.

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