As Back-To-School Costs Pile Up, SMART Loans Can Help

Parents know this story well. Summer winds down, and back-to-school shopping and spending picks up. Backpacks, pencils, notebooks, electronics, new clothes, doctor’s appointments, activity fees, tuition fees, textbooks—the list is endless. Unfortunately, your resources likely are not.  

If you’re feeling the crunch on your finances this time of year, you are not alone. 39% of parents surveyed by Intuit Credit Karma^® felt they were unable to afford back-to-school shopping this year^.1 Many parents expect to take on debt, and often that debt comes in the form of high interest credit card debt.  

In this article, we will discuss the rising back-to-school costs and some tactics to help parents avoid or consolidate high interest credit card debt to cover them.

Back-To-School Costs Can Add Up

One study found that parents can expect to spend around $620 per child on back-to-school costs this year^.2 If you have multiple kids, that can quickly add up. Not to mention other costs such as laptops or tablets, fees for sports and activities, or tutors. If you have children in college, you might have further costs that stretch past their student loans, like textbooks.  

It’s no surprise that many parents feel they must turn to high interest debt via credit cards just to keep up. With $1.21T in credit card debt in the United States^,3 many parents may even find themselves falling further into credit card debt. It’s a stressful, challenging position to be in. However, parents are finding ways to cut costs or consolidate high interest debt to make the start of the school year less stressful.

Cost-Cutting Strategies

First, start by taking stock of what you already own. You might not need to buy new pencils or folders if your kids still have some left from last year. Dig around the old backpack and closet, see what older kids can hand down to the younger ones, then start searching other outlets for what’s missing. 

Of course, parents should take advantage of back-to-school sale prices when possible. Though you may prefer to knock everything out in one big shopping spree, it could help you find more sale opportunities if you spread things out.  

Similarly, you could get in touch with other parents in your child’s school and split costs across bulk purchases at places like Costco^® or Sam’s Club^®. 

Many parents also find success with coupons, or others will find free items online through Facebook Marketplace^® or various Free and For-Sale pages. You could also look at community organizations like the local library to see if they are running school supply drives that you can access.  

Still, even the most diligent cost-cutters may struggle to avoid taking on credit card debt or even adding onto their existing high interest debt. If you find yourself struggling with this kind of debt, there are ways to consolidate it into potentially more manageable debt.

Consolidating High Interest Debt

There are a variety of ways to consolidate credit card debt into something more manageable. Two options that we have seen help families in that situation are the SMART Loan and a home equity line of credit (HELOC).

The SMART Loan

The SMART Loan is a personal loan that can be used to help pay for a range of financial needs. One common use case for this type of loan is debt consolidation. The average interest on a credit card in the United States is 24.35%^.4 That interest can make those cards difficult to pay down.  

But, depending on your personal financial situation, the SMART Loan can help you consolidate most, if not all, of that debt, and instead pay down a loan with competitive interest rates, various fixed term choices, a single monthly payment and no hidden fees.

HELOC

If you are a homeowner with enough equity in your home, you may be able to take out a home equity line of credit to pay down your high interest debt. However, it is very important to note that HELOCs are secured by your home.  

This means there is some risk that borrowers should carefully consider before pursuing this option. That’s why our loan officers take great care during the application process to provide borrowers with important information on the risks and benefits of this product. 

Now, HELOCs typically have a lower interest rate than credit cards, potentially allowing you to save on interest payments every month. Our HELOC product offers fixed or variable interest rates, which should also factor into your decision.  

Depending on the amount of equity you’ve built up in your home, you may also qualify for a higher credit limit through a HELOC. Based on state laws, lenders may allow you to borrow up to 85% of your home’s appraised value, minus any outstanding mortgage balance. This is known as the loan-to-value (LTV) ratio.  

Then, once you’ve paid off your credit card debt and any other purchases you intended to make with your HELOC, you only have to repay what you borrowed. So, if you had money left in your HELOC, you won’t have to repay that portion.

Final Thoughts

The beginning of a new school year is such an emotionally charged time for both parents and their kids. But for parents struggling to cover back-to-school costs, it can be especially difficult. We know how stressful that can be.  

Hopefully, some of the cost-cutting strategies mentioned above can make this new school year a bit more manageable. Should you find yourself falling into high interest credit card debt, though, know that there may be financing options available to help you.  

Reach out to a trusted lender to find out if there are debt consolidation solutions that could fit your needs.  

1.) https://www.creditkarma.com/about/commentary/back-to-school-2025-financial-stress-tariff-worries-and-labubu-dolls

2.) https://www.yahoo.com/lifestyle/articles/back-school-costs-climb-more-214148140.html

3.)  https://www.cnbc.com/2025/08/05/ny-fed-credit-card-debt-second-quarter-2025.html

4.) https://www.lendingtree.com/credit-cards/study/average-credit-card-interest-rate-in-america/