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.
Need to borrow for back-to-school shopping?
Use a cash-back credit card
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.
The Chase Freedom Unlimited® is a no-annual-fee card that earns generous cash-back on everyday purchases and a lucrative welcome bonus. Plus, if you pair it with a premium Chase credit card that allows point transfers, you can convert your cash back into flexible travel rewards.
- Users get a high rewards rate and strong welcome bonus
- Purchases and balance transfers receive an intro APR
- No annual fee
- Has a foreign transaction fee
- Few rewarding ongoing benefits
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening
- Enjoy 5% cash back on travel purchased through Chase TravelSM, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases.
- No minimum to redeem for cash back. You can use points to redeem for cash through an account statement credit or an electronic deposit into an eligible Chase account located in the United States!
- Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 18.24% - 27.74%.
- No annual fee – You won't have to pay an annual fee for all the great features that come with your Freedom Unlimited® card
- Keep tabs on your credit health, Chase Credit Journey helps you monitor your credit with free access to your latest score, alerts, and more.
- Member FDIC
Balance transfer fee
Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, in the first 60 days. After that, either $5 or 5% of the amount of each transfer, whichever is greater.
Foreign transaction fee
3% of each transaction in U.S. dollars
What makes the Citi Double Cash® Card special is that it sits near the top of its class in several categories. It is an excellent option if you want flat-rate rewards, a balance transfer intro-APR or no annual fee.
- Balance transfers get a long intro APR
- Generous flat-rate cash-back rewards structure
- Earns transferable rewards
- No annual fee
- It has a foreign transaction fee
- Intro APR only applies to balance transfer
- Points transfer ratios are reduced compared to premium cards
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
- Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time. Plus, earn 5% total cash back on hotel, car rentals and attractions booked with Citi Travel.
- Balance Transfer Only Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 18.24% - 28.49%, based on your creditworthiness.
- Balance Transfers do not earn cash back. Intro APR does not apply to purchases.
- If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
- There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
Balance transfer fee
There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. A balance transfer fee of 5% of each transfer ($5 minimum) applies if completed after 4 months of account opening.
Foreign transaction fee
3%
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.
The Capital One QuicksilverOne Cash Rewards Credit Card is available to those with limited-to-fair credit, which makes it surprising that it features an elevated 1.5% cash back on all purchases.
- Available for those with limited to fair credit
- Simple 1.5% cash back rewards structure with no caps or categories to track
- Get automatically considered for a higher credit line in as little as six months
- Charges a high variable APR if you carry a balance from month to month
- Comes with a $39 annual fee
- No welcome bonus offer
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn unlimited 1.5% cash back on every purchase, every day
- No rotating categories or limits to how much you can earn, and cash back doesn't expire for the life of the account. It's that simple
- Be automatically considered for a higher credit line in as little as 6 months
- Enjoy peace of mind with $0 Fraud Liability so that you won't be responsible for unauthorized charges
- Help strengthen your credit for the future with responsible card use
- Earn unlimited 5% cash back on hotels, vacation rentals and rental cars booked through Capital One Travel
- Monitor your credit score with CreditWise from Capital One. It's free for everyone
- Check out quickly and securely with a contactless card, without touching a terminal or handing your card to a cashier. Just hover your card over a contactless reader, wait for the confirmation, and you're all set
- Top rated mobile app
Balance transfer fee
- $0 at the Transfer APR, 4% of the amount of each transferred balance that posts to your account at a promotional APR that Capital One may offer to you
Just remember that cash-back rewards are only valuable if you avoid interest charges. Carrying a balance from month to month can quickly erase the value of any rewards you earn, so this strategy works best if you can pay off your purchases before interest starts accruing.
Charge purchases to a 0% APR credit card
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.
The Wells Fargo Reflect® Card is one of the absolute best cards you can apply for if you want to save on interest and pay down debit quickly thanks to its extra generous intro-APR offer on purchases and qualifying balance transfers.
- Incredible intro-APR for purchases and qualifying balance transfers
- No annual fee
- Cell phone insurance: up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible
- No rewards
- No welcome bonus
- High balance transfer fee
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 17.49%, 23.99%, or 28.24% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min: $5.
- $0 annual fee.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
- Through My Wells Fargo Deals, you can get access to personalized deals from a variety of merchants. It's an easy way to earn cash back as an account credit when you shop, dine, or enjoy an experience simply by using an eligible Wells Fargo credit card.
Balance transfer fee
5%, min: $5
Foreign transaction fee
3%
The Blue Cash Everyday® Card from American Express has no annual fee and bonus rewards on a wide range of common expenditures. On top of that, you also have access to an intro-APR offer for purchases and balance transfers. So this card can help you save in a variety of ways.
- Up to $264 in streaming service and meal kit credits every year (subject to auto renewal)
- High cash-back rates in popular spending categories
- No annual fee
- The best bonus cash-back categories are capped
- Has a foreign transaction fee
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply and find out your welcome offer. As High As $200 cash back* after you spend $2,000 in purchases on your new Card within the first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply, and if approved: 1. Find out your offer amount 2. Accept the Card with your offer 3. Spend $2,000 in 6 months 4. Receive the cash back. *Cash back is received in the form of Reward Dollars that can be redeemed for a statement credit or at Amazon.com checkout.
- No Annual Fee.
- Enjoy 0% intro APR on purchases and balance transfers for 15 months from the date of account opening. After that, your APR will be a variable APR of 19.49%-28.49%.
- Earn 3% cash back at U.S. supermarkets, 3% cash back on U.S. online retail purchases, 3% cash back at U.S. gas stations, on eligible purchases for each category on up to $6,000 per year in purchases (then 1%). Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit and at Amazon.com checkout.
- Get up to a $7 monthly statement credit after using your enrolled Blue Cash Everyday® Card for a subscription purchase, including a bundle subscription purchase, at DisneyPlus.com, Hulu.com, or Stream.ESPN.com U.S. websites. Subject to auto-renewal.
- Terms Apply.
- See Rates & Fees
Balance transfer fee
Either $5 or 3% of the amount of each transfer, whichever is greater.
Foreign transaction fee
2.7% of each transaction after conversion to US dollars
Consider a personal loan
If a credit card isn't the right fit, or you don't qualify for a 0% APR offer, a personal loan may be a better way to finance your back-to-school expenses. Personal loans provide a lump sum of cash that you repay in fixed monthly installments over a set repayment term, making it easier to budget for your payments.
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.
Upstart offers accessible personal loans for people with fair or average credit.
- Accept applicants with low or no credit
- No early payoff fees
- Most loans funded the next business day
- High late fees
- Origination fee of 0% to 10% of the target amount
- $10 fee for paper copies of loan agreement
LightStream Personal Loans offer low APRs, no fees and the ability to apply online. Its terms are as long as 20 years, or 240 months.
- Same-day funding available through ACH or wire transfer (conditions apply)
- Loan amounts up to $100,000
- No origination fees, no early payoff fees, no late fees
- LightStream plants a tree for every loan
- Requires several years of credit history
- No option to pay your creditors directly
- Not available for student loans or business loans
- No option for pre-approval on website (but pre-qualification is available on some third-party lending platforms)
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