Sending your kids back to school after a long summer comes at a steep price, one that’s driving a surprising number of parents into debt.

According to a recent MagnifyMoney survey, more than 1 in 5 parents will go into debt to cover the cost of back-to-school expenses. Debt or no debt, back-to-school essentials don’t come cheap. Nearly three-quarters of parents plan to spend more than $100 on back-to-school items, and one in four plan on spending $500 or more.

Part of the reason parents are digging themselves into debt is from outside pressures to send their kids back to school with new clothing and supplies.

More than half of parents who will take on debt to finance back-to-school purchases said they felt pressure to buy new things for their kids.

The retail credit card trap

Parents going into debt to pay for back-to-school expenses are three times more likely to use a retail credit card to pay for those expenses than their debt-free counterparts, MagnifyMoney found. Among parents planning to take on debt, 17 percent will pay for at least some of their expenses with a retail credit card.

That’s a bit frightening, because most retail cards come with alarmingly high interest rates. The Target REDCard and the Walmart Credit Card, for example, carry interest rates of 22.9%. Parents financing $300 on a retail card with a 22.9% rate will spend an additional $38.50 in interest – more than 10% of the initial cost – if they pay off the debt over the course of a year.


5 ways to avoid back-to-school debt

Set a budget. Clearly, back-to-school supplies have become a big-ticket expense, and big-ticket expenses require budgeting. Set and stick to a predefined budget, preferably one that you can manage without the aid of credit.

Stick with cash. Not coincidentally, 62 percent of parents who avoid using a credit card spend less than $300 on back-to-school expenses. Stick with cash, and you’re more likely to keep your costs down and stay out of debt.

Don’t buy everything at once. Focus on the essentials like school supplies and, yes, a new pair of shoes or a great First Day outfit. But resist the urge to totally redo the school wardrobe all at once. You can easily shop throughout the year and you might even find better deals in the Fall and winter when stores are eager to push out old inventory.

Buy items secondhand when you can. Whether it’s hand-me-downs, thrift stores, or just a good, hard look at what’s already in your closets, chances are you can find at least some of what you need without paying retail price.

Save in advance. Unlike an unexpected illness or a broken appliance, going back to school is predictable. It happens the same time every year, and you generally have a good idea of what you will and won’t need long before you actually set out to shop (more on this in a moment). All of which means you have ample time to save. Setting aside a little money each month in the run-up to back-to-school shopping can help you keep debt at bay when the time to spend comes.

Spread it out. If you start shopping for things you know you’ll need for the new school year early in the year, can you spread out your costs and avoid one big expensive shopping spree at the last minute. If you see a deal in February on something you know you’ll need come September, take advantage then and there. '

MagnifyMoney is a price comparison and financial education website, founded by former bankers who use their knowledge of how the system works to help you save money.