The Financial Cost of Keeping Up with Social Media Influencers

It can be hard not to get caught under the spell of social media influencers. No matter who you follow or where you follow them on social media, influencers are always selling their lifestyle. From clothing and handbags to hotels and home furnishings, every product or experience you can imagine has a handy link you can click to purchase one of your own.

While it can be fun to engage with the latest trends and “it” products, it can also get expensive. It’s important to understand the short- and long-term costs of trying to keep up with social media influencers before you find yourself in over your head.

Taking on excessive debt

One of the biggest pitfalls of trying to keep up with social media influencers is that you could rack up a ton of credit card debt. Before you know it, you’ll be trying to figure out how to manage paying back what you owe plus interest while still trying to afford the rest of your daily expenses.

If you find yourself weighed down by debt, particularly high-interest debt, or you’re having a hard time keeping track of different debt bills each month, you might consider taking out a debt consolidation loan. A debt consolidation loan rolls multiple debts into one loan with a single monthly payment, potentially with a lower interest rate than what you’re currently paying.

Damaging your credit score

Another risk of attempting to live the life of an influencer is damage to your credit score. You could hurt your credit in two main ways.

Opening too many credit cards

While many influencers travel first class, stay at luxury hotels and wine and dine at top restaurants around the world, most of them are not paying full price — if they’re paying at all. If you try to keep up with them, entire paychecks will be gone before you know it.

While opening a new credit card every time you need funds is tempting, applying for multiple cards, especially one after another, could hurt your credit.

Each time you apply for a card, it triggers a “hard check” on your credit. Multiple hard checks in a short amount of time might communicate to a lender that you’re trying to borrow more money than you can repay.

And the more you charge to your cards, the more you increase your credit utilization ratio, which is the amount of your available credit you’re using at a given time. A high credit utilization could have a negative impact on your overall credit.

Paying bills late or not at all

One of the downsides of overspending and borrowing money you can’t pay back is that eventually the bills will come due. If you can’t afford to make even minimum regular payments for your monthly credit card bill, you’ll be incurring interest and possible late fees and penalties.

If you completely miss payments for a certain period — typically 30, 60 or 90 days depending on your agreement — most lenders will report your missed payments to the three main credit bureaus (Equifax, Experian and Transunion). Doing so could lower your credit score and stay on your credit report for up to seven years.

A low credit score might prevent you from being approved for a mortgage, auto loan, renting an apartment or even securing a job in the future if your employer requires a credit check.

Not prioritizing your savings

The more money you spend, the less you save. Not saving enough could put you in a difficult spot financially if you ever need extra funds to deal with an urgent situation or face an unexpectedly large bill. You’ll also miss out on growing your money through interest.

Additionally, you may not be able to afford to contribute to a 401(k) or IRA retirement account, which could mean you have less money to draw on later in life.

Keep an eye on your finances instead of on influencers

Wearing the latest fashions, buying luxury goods and taking fabulous vacations is fun, but it may not be worth the financial risk.

Consider how taking on debt, opening too many credit cards, not paying your bills and not prioritizing your savings could negatively affect you over the short and long term. Set yourself up for a more secure financial future by looking out for your finances now.

Notice: Information provided in this article is for information purposes only and does not necessarily reflect the views of parkmagazineny.com or its employees. Please be sure to consult your financial advisor about your financial circumstances and options. This site may receive compensation from advertisers for links to third-party websites.