With new styles consistently making it onto catwalks around the world, it can be easy to rely on your credit card to snap up this season’s latest clothing. But is your fashion addiction putting a strain on your finances?
According to the Reserve Bank of Australia, Australia’s total credit card debt currently accruing interest is now clocking upwards of $33 billion. Add to this a rise in retail trade and you’ve got a sinister looking spending trend.
However, while recent figures from the Australian Bureau of Statistics showed retail trade turnover increased 0.2 percent month-on-month to August, in trend terms, the clothing, footwear and personal accessory retailing dropped 0.1 percent.
So are fashion-conscious Australians becoming more savvy with their spending — or are they turning to overseas retailers and spending up a storm online?
Research from IBISWorld shows that fashion lovers are turning towards fast fashion trends, which could be encouraging overseas online spending.
“In many areas of retailing, the industry is fragmenting. Fast fashion business models, which have been harnessed particularly well by overseas retailers, are benefiting from our desire for up-to-the-minute and affordable fashion,” explained Daniel Ruthven, IBISWorld Australia General Manager.
Is fast fashion really cheaper?
The findings from IBISWorld beg the question: Is fast fashion the solution to individuals’ desires to have on-trend clothing, without racking exorbitant credit card repayments?
The answer may be yes as well as no. If you’re buying items that are likely to be off-trend in a season or two, there’s not much point paying top dollar.
But when it comes to classics, such as jeans, knitwear, tailored shirts, boots and fitted pants, sometimes it’s worth paying more for quality. You’ll get more wear out of the items over the years, making them a better long-term investment.
Regardless, we do know one thing for sure, Australia’s current credit card debt is no laughing matter. So how can we better manage our fashion splurges and keep our credit card debt to a minimum?
Hunt out the end-of-season sales
Perhaps you’re in dire need of some comfortable yet smart work shoes or a new winter coat.
Don’t dismiss end-of-season sales – they can be a great opportunity to pick up much-needed items for half the price. While you might not get a lot of wear out of them immediately, they’ll last you for years to come.
Embrace block colours
If you’re a stickler for a shopping fix but are worried about mounting credit card interest, try this tip.
Block colours are much easier to pair with each other than prints. This means you can buy fewer items, but still create plenty of different looks!
Check your credit
Finally, make sure you’ve got a handle on your credit card.
It might be worth running a credit card comparison and switching to a new card. Many lenders offer no- or low-balance credit card transfer deals.
This means you can transfer your entire credit card balance and in some instances pay zero percent interest for six, 14 or 16 months! This gives you an opportunity to get your spending in check and not worry about hefty interest for a set period of time.
However, make sure you’re well aware of what the interest rate will revert to when the introductory period has lapsed.