One of my few hard-and-fast money rules
Hint: It is very relevant this time of year. Plus, some scary debt data and a look toward holiday shopping
Hi there, my friend.
I don’t have many hard-and-fast rules when it comes to personal finance. There’s just so much gray area in so many things around money. What’s right for me may not be right for you or someone you love.
Still, there are some rules that apply to most everyone — one of which always pops up this time of year.
Here it is…
If you regularly carry a balance, a store credit card isn’t for you.
Why? Sky-high interest rates, even by typical credit card standards.
I just did a report for LendingTree that found the average interest rate on a new store credit card is 30.58% — which is just flat-out bananas. (The average rate for all new credit cards is 24.19.) Yes, rates have fallen from last year’s heights, but the typical new store credit card APR is still over 30%.
When rates are that high and you carry a balance, you simply can’t win. It doesn’t take long at all for the interest you’ll accrue to outweigh any rewards you might receive.
Put another way, you don’t need to be an accountant to understand that paying 30% interest to save 20% on a purchase is a bad deal.
(One possible exception to the no-store-cards rule: If you are just getting started with credit or you’re looking to rebuild your credit after a few stumbles, a store credit card can be a viable option. That’s because these cards are often easier to get than other types of cards, and with thin or damaged credit, it may be one of the few things available to you. It is still important to avoid carrying a balance when possible, of course.)
For more on this topic, and the store’s credit card’s evil sibling “special financing,” check out this report I wrote last year…
More on holiday shopping…
With as crazy as 2025 has been in most every way, I’m still in a bit of denial that it is already November. I had a reporter ask me if I had already started holiday shopping, and I literally laughed at them. (And then immediately apologized.) I’ve barely given it any thought.
Still, despite my denials, the holiday shopping season is here, so I wanted to share another piece that I wrote last year. In it, I pass along a few basic truths to keep in mind as Black Friday, Cyber Monday and the rest of the season approaches.
A new debt record! Sigh…
Yesterday, the Federal Reserve Bank of New York released its quarterly report on household debt and credit. (I can just hear you saying, “Duh! I look forward to it every quarter!” Haha.) It is generally considered to be the gold standard when it comes to tracking consumer debt in the U.S., and the numbers were not great.
It showed that overall household debt hit a record $18.59 trillion — yeah, you read that right — in the third quarter. That’s the highest since the Fed began tracking in 1999, meaning it is almost certainly the highest ever.
Mortgage debt, auto loan debt, credit card debt and student loan debt are all at the highest levels ever tracked by the Fed.
Even worse news: Debt is almost certainly going to rise in the fourth quarter, too. That overall debt number hasn’t fallen from one quarter to the next since the second quarter of 2020, which you just might remember was kind of an unusual time.
Not all debt rises every quarter, though. For example, credit card debt tends to rise in second, third and fourth quarter before falling in the first quarter, as people devote the new year (and their tax refund) to getting their debts under control. There’s no reason to expect anything different at the start of next year.
What about you?
Have you started shopping already? Will you take on any debt? Vote below, and then share more in the comments.
Until next time!
Matt