April 26, 2017 @ 4:30 PM
If you're coveting a pair of chic Gucci mules for spring, you're in good company. But unless you have a $650 burning a hole in your skinny jeans, you may be tempted to throw them onto a credit card and pay them off ... whenever. (Honey, we've all been there.)
RELATED: Celebs Really, Really Love Their Gucci Loafers
Watch the video above to find out exactly how much more in interest charges you'll ultimately owe if you take your time paying the shoes off. The difference may shock you—but you totally deserve splurgy spring accessories no matter what you pay.
Coinage, Life Well Spent. Presented by GEICO. Lasting after Gucci new Princetown Leather Slippers, you've decided that they must be apart of your wardrobe but you are unsure whether you should purchase them with your debit or credit card. We've got you. Okay, let's pretend you live in Chicago. Sales tax is over 10% so you're paying extra $60 on the shoes. Purchasing the Gucci's with your debit card, means you're done paying them off, but there's $650 less in your checking account. Let's see what happens when you pay with a credit card and pay only the minimum each month. An average credit card interest rate is around 16%, if the shoes are the only thing on your card and you made the minimum payment, usually about 4% of the balance You pay $26 per month for nearly three years including $128 interest. But let's be real, maybe you already sorta kinda have an outstanding credit card balance over $1300 because you bought these amazing Celine sunglasses and Mansur Gavriel Posternak bag on your last shopping spree. With the shoe purchase and tax, the updated amount in your account would be nearly $2000. By paying the minimum amount of 4% on the balance, roughly $80, it would take almost 3 years to pay off! Plus you'd pay an additional $402 in interest. That's practically enough for another pair of Selene sunglasses Bottom line, you're better saving up for a splurge and paying with debit. Think of all the other accessories you can buy by not paying interest. [SOUND] Coinage, life well spent presented by Geico.