To answer OP - It’s a No for me. Several years to pay for a purse simply isn’t my thing.
Would you go into debt if it meant that you could buy a Chanel bag?
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My comment was not meant to make either of you or anyone else feel bad. As I said, adults get to make their own choices.
However, what is not in question is that it’s never a good financial decision to pay interest on a luxury item. Trying to conflate the rational, mathematically sound decision to leverage an appreciating asset (whether it be a home or an ownership stake in a corporation) with the decision to go into consumer debt for a bag makes no sense. These are not the same types of decisions.
And it isn’t an opinion on whether going into interest bearing consumer debt for non needed items is a good financial decision. It’s not. It may make someone happy, give them joy, provide confidence or any other positive emotion. But it is not a sound use of financial leverage and no financial advisor or expert would or could say so and be supported by fact.
Again, no one need feel bad about their choices. We all get to do what we want to do.
For me, it’s more the philosophy of not purchasing a luxury (non essential) if I couldn’t afford to pay for it outright.
It may make financial sense to carry some debt, but I’ve always paid my Amex in full, and it’s really the only card I use. (I have a chase sapphire, but only use it where Amex is not accepted.
However, many disagree; and, it’s part of way Klarna etc are so popular.
ETA: I’ve read that people who use klarna tend to spend on average 30% more than consumers that do not, and that is frightening to me.
It may make financial sense to carry some debt, but I’ve always paid my Amex in full, and it’s really the only card I use. (I have a chase sapphire, but only use it where Amex is not accepted.
However, many disagree; and, it’s part of way Klarna etc are so popular.
ETA: I’ve read that people who use klarna tend to spend on average 30% more than consumers that do not, and that is frightening to me.
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Not personally, no.
It's easy for me to say though since I already have nice bags including Chanel. I'm sure the fear of consistently steep price increases (with the reseller marker mirroring) makes it harder for some people to wait/save. The increases have encouraged a now or never panic.
I worry that some luxury brands offer serial payment plans too. They are a form of a loan (as is credit). I don't believe that luxury brands should make something (often) a crazy price more tempting, especially since we know they are aimed at a younger demographic. It may make financial sense to spread the cost, but it takes even more discipline.
It's easy for me to say though since I already have nice bags including Chanel. I'm sure the fear of consistently steep price increases (with the reseller marker mirroring) makes it harder for some people to wait/save. The increases have encouraged a now or never panic.
I worry that some luxury brands offer serial payment plans too. They are a form of a loan (as is credit). I don't believe that luxury brands should make something (often) a crazy price more tempting, especially since we know they are aimed at a younger demographic. It may make financial sense to spread the cost, but it takes even more discipline.
Definitely a terrible idea. :o
According to the Federal Reserve Bank, collectively Americans now owe a record $1.17 TRILLION
on credit cards.
Credit card debt rose by 24 billion in the 3rd quarter of 2024 & is 8.1% higher than a year ago
with serious delinquency of 11.1%
on credit cards.
Credit card debt rose by 24 billion in the 3rd quarter of 2024 & is 8.1% higher than a year ago
with serious delinquency of 11.1%
.
*I mean Chanel bag customers
ETA: I found a chart on demographics (no idea how accurate it is, and don’t know the sample size or criteria or age/occupation for participants) This is not the one I was thinking of originally (and, it isn’t correlated to bags specifically. Of course, a student living at home might comprise a significant percentage too…
forgot to add, I once saw a chart re age and income of Chanel customers* and it was younger than I expected. For most of them, a Chanel bag was more than their monthly income
*I mean Chanel bag customers
ETA: I found a chart on demographics (no idea how accurate it is, and don’t know the sample size or criteria or age/occupation for participants) This is not the one I was thinking of originally (and, it isn’t correlated to bags specifically. Of course, a student living at home might comprise a significant percentage too…
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Not sure why you would think i felt bad... I already said i wouldn't go into debt for a handbag and that I don't have any debt (use credit card for purchases for convenience bc i don't like to carry cash around but pay card off in full monthly). I was merely pointing out what could be another viewpoint for many and that I wouldn't judge. To each their own but don't worry, I'm not offended by anything you've said
Hmm, I think years ago I would have considered it and I personally wouldn’t judge anyone for it if they can afford the repayments. Depending on the price of the item and if you can get a low interest loan that might only add maybe £200 to the item v saving and it goes up in price by that much or more by the time you have saved I don’t see the problem if you’re happy with it and can afford the payments. Is it the smartest choice? No not really but I also think life is short and if it’s something you really really want and will make you happy and you can afford it or are happy to make other cuts elsewhere I don’t think you should be made to feel bad about it. People take out loans for all sorts of things.
I would only draw the line if you’re absolutely broke and the repayments will be a struggle. On another note I think interest free loans or repayment plans are quite sensible, we have a lot of money in our offset mortgage which saves us money on repayments and money in a savings account, in my mind it doesn’t make sense to use money that is earning interest when you can pay monthly with no interest. Just my thoughts but I respect everyone else’s.
I would only draw the line if you’re absolutely broke and the repayments will be a struggle. On another note I think interest free loans or repayment plans are quite sensible, we have a lot of money in our offset mortgage which saves us money on repayments and money in a savings account, in my mind it doesn’t make sense to use money that is earning interest when you can pay monthly with no interest. Just my thoughts but I respect everyone else’s.
This is interesting but also not surprising given that it was 2018. I remember the handbag being everywhere worn young celebrities which really made it popular and sought after handbag for young woman. Young woman are just entering the workforce, they just wouldn’t be able to afford the handbag with their starting salary.
Isn’t a Chanel handbag more than the monthly income for most Americans even if you’re a high income earner? In UK you need £180K, average salary is around £37K so that’s 4x the average and doesn’t include pension deductibles, mortgage, student loans, etc. High income earners here is generally those considered above £100K, that means you pretty much need almost earning double this to be able to afford the handbag in your monthly take home pay. It’s also almost in the top 1% of income earners threshold, which is 182K in the UK.
Edit: I’m using Chanel classic flap cost vs monthly income here
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Absolute craziness.... what is the 'luxury' in taking out a loan and repaying with interest?
Absolutely not. And this makes me sad.
These stats should be viewed the same way as random opinion poles. People who take part in, in-person focus groups are often tempted by the expenses offered (around $100) or will do luxury research surveys for free. Sometimes a company will commission a study and put forward named clients they think will be cooperative, but not Chanel. I know rich/high spend people can be 'cheap' but IMO, younger people will more likely to agree to take part than those we may call reg clients, VICs or VVICs. The subject pool will skew any meaningful data. On another site 'legit' (2023)* they report 34% of all Chanel customers are 24/35 years old (not just bags, could even be Chanel Beauty which is Chanel's biggest revenue stream but far from a bag) and under 7% are 55-64. It's possible, but it doesn't translate into spending history, spend per item, spend per visit/haul or spend per annum. Iv'e included a screenshot since I think these particular stats may be behind a paywall.
A bag is a cost effective Chanel item for a younger person because it's a little bit of Chanel that can be worn every day leading to a low CPW.
That doesn't mean I would encourage anyone to take out a loan, but there is an argument for a considered choice, even if it's as a younger client.
Statistia: There is no way any outside company would or could know how old the average Chanel customer is for sure, let alone their income. Chanel not only is a private company but even public companies don't share detailed figures even to shareholders. This would most likely be from a marketing company. Owning Chanel is not buying it either. I also have a problem with the language. 'Owning' is not buying. More likely too, these respondents came from one geographical area, whereas Chanel is a global force. Additionally, what people say they own and earn can be very different from what is fact.
Chanel has so much data on all its clients but it's more behavioral patterns, related to taste, likes/dislikes, size and geographic.. Many of the VVIPs at Chanel have accounts with Chanel, their choices often picked-up by a third party. Chanel knows the life of their clients better than family relatives. They are certainly not going to sell to Statista.
Chanel would know ages/income factually is from CC data (which supposes all customers use a CCs and not a debit card, cash or other means including someone else buying). They use this data for marketing and in-house buying. CCs only indicate a good credit history (point made by @880 - sometimes we need to use credit to obtain it). Age is noted in the span of a decade. Some CCs are usable by a third party so that the transaction is not the same as on the card. The number of people working in Chanel at HQ would be only a handful and sign NDAs. People sometimes use a passport (to reclaim duties/tax). In terms of the tax refund info that would be not shared WW, usually due to data protection only locally and erased after a number of specified years. Anyway, all in all, take everything written about Chanel or any luxury companies with a grain of salt.
Chanel has so much data on all its clients but it's more behavioral patterns, related to taste, likes/dislikes, size and geographic.. Many of the VVIPs at Chanel have accounts with Chanel, their choices often picked-up by a third party. Chanel knows the life of their clients better than family relatives. They are certainly not going to sell to Statista.
Chanel would know ages/income factually is from CC data (which supposes all customers use a CCs and not a debit card, cash or other means including someone else buying). They use this data for marketing and in-house buying. CCs only indicate a good credit history (point made by @880 - sometimes we need to use credit to obtain it). Age is noted in the span of a decade. Some CCs are usable by a third party so that the transaction is not the same as on the card. The number of people working in Chanel at HQ would be only a handful and sign NDAs. People sometimes use a passport (to reclaim duties/tax). In terms of the tax refund info that would be not shared WW, usually due to data protection only locally and erased after a number of specified years. Anyway, all in all, take everything written about Chanel or any luxury companies with a grain of salt.
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I personally would not. I can be content with not having any luxuryitems . As long as I have cats!
But, I can't judge anyone that makes that choice if it doesn't affect me.
But, I can't judge anyone that makes that choice if it doesn't affect me.