What buying groceries with a credit card really costs

Hand holding grocery list

I bumped into a friend at the grocery store recently and witnessed her buy what appeared to be a year's worth of dog food with her credit card.

Her reasoning: She had a coupon.

And even though this would-be frugalista couldn’t afford the groceries that she didn’t need, she was intent on purchasing them anyway.

Unfortunately, the savings my pal scooped up by clipping coupons could be lost to interest charges.

It could make sense to use a credit card over cash at a grocery store for convenience, because you rely on it to track spending or if you like to rack up reward points.

Trouble is, if you can’t pay off the bill each month, you could wind up paying a whole lot more for that gallon of milk or steak dinner than you planned.

The U.S. Department of Agriculture says a family of four spends between $533.40 and $1,208.10 a month on groceries depending on how "thrifty" its purchasing plan is.

Let's say for one month, you put all $1,200 of your grocery expenses on a credit card, which carries a 15% APR, and pay just the initial minimum of $48 each month.

It would take you 31 months to repay the bill and cost $248 in interest. If you paid back half the bill, it would still take you more than two months and cost $23 in interest.

Our minimum payment calculator shows how long it will take, and how much you'll spend in interest, if you make nothing more than the minimum payment on your credit card debt.

Use our credit card payoff calculator to develop a plan to wipe out your debt as quickly, and cheaply, as possible.

So clearly, the 50 cents saved on a loaf of bread or gallon of milk with a coupon doesn't result in any savings if you have to carry these things in your credit card bill’s running balance.

In general, you shouldn’t swipe for bargains, to earn points, or any other reason if the bill can’t be paid in full when your statement shows up.

And remember there’s never a good time to charge luxury items like ingredients for a lavish meal (filet vs. burgers or lobster instead of baked chicken) because those types of splurges can be quite costly over time.

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