I get sent articles/texts/Facebook messages of some really cool money topics. But sometimes, just sometimes, I get sent things that make me want to shake someone. (don’t worry- I’m kidless!)
I was sent a Facebook status post. A young, 18 or 19 year old female bragging about maxing her “Victoria’s Don’t Tell Nobody” card…within the first hour.
The video encapsulates my reaction to this post quite nicely, but just in case you missed it, or just don’t like watching videos let’s talk about why store credit cards are crap.
1. You pay 18-24% interest.
In the personal finance world- we call that DUMB. Most people’s investments don’t have that rate of return.
Here’s a money tip: Don’t spend more than you earn.
2. You don’t save any money.
Most of the time I get offered a store card so I can save 10% on my $30 purchase. Let’s just ponder this for a second. Would you rather save $3 or pay $4.86 ($30-$3 savings x 18% interest) to save $3?
Here’s the kicker: research shows that when you spend money with plastic you will spend 12-18% more than with cash.
So yes, not only will you pay outrageous interest, you will likely overspend, going further into debt.
STOP IT! This is not the way to win with your money. Cut your credit card up. Don’t buy things to try to feel better about yourself. You are beautiful the way you are!
Maxing out a card at Victoria’s Secret will not solve your problem; it will only create more pain and suffering.