Living with credit, Rewards, Shopping

Why a Starbucks credit card has me steamed

John Egan

I’m a bit steamed – just like a latte – about the recent announcement from the ubiquitous Starbucks coffee store chain that it’s rolling out its own credit card and prepaid card.

During the company’s Nov. 2 earnings call with Wall Street analysts, Starbucks President and CEO Kevin Johnson revealed that this winter, Starbucks is teaming up with Chase to introduce a co-branded Visa credit card and, shortly afterward, a prepaid Visa card. The credit card will enable customers to amass Starbucks rewards for purchases at its stores as well as other merchants.

The Starbucks credit card is a cousin – maybe a second or third cousin – of rewards credit cards from the likes of Amazon, Best Buy, Home Depot and Macy’s, and pretty much every major airline and hotel chain. Even Uber has rolled out a rewards card aimed at millennials. So you can’t blame Starbucks for getting into the rewards credit card game.

But c’mon, Starbucks, do you really need to give anybody an excuse to spend even more money at your stores (and possibly brew up more debt)?

Just a day after Starbucks’ announcement about the new credit card, a report surfaced indicating that some budget-minded consumers are kicking their Starbucks habits because the company’s drinks have become too pricey.

Granted, a single Starbucks drink won’t bust your budget. But if you’re gulping down a Starbucks Caramel Macchiato every workday, your finances will feel it at roughly $4 to $5 per drink. A 2017 study from Acorns, an investment app, found the average American spends about $1,100 a year on coffee (at Starbucks and elsewhere).

Making matters worse for Starbucks devotees, the chain just hiked coffee prices by anywhere from 10 to 30 cents at some locations.

Now, it would be hypocritical for me to completely bash Starbucks. I’m a regular Starbucks customer; I even carry a loadable Starbucks card in my wallet.

But I do worry about how much money I’m pouring into my coffee fix (usually at Starbucks), as well as how much everyone else is spending on it.

Why? Because that money is being siphoned from other, more vital purposes.

Case in point: A little over 41 percent of American millennials said they’d spent more money on coffee in the past year than they’d allocated for retirement savings, according to an Acorns survey.

Sure, that Pumpkin Spice Latte tastes awesome right now, but the pleasure from that cup of coffee – including the caffeine buzz – is temporary. That latte won’t take care of you once you’re retired and require long-term care.

Aside from the singular concern about sinking money into our Starbucks habits, there’s also the looming issue of customers amassing debt with the Starbucks credit card.

I sincerely doubt consumers will go bankrupt strictly by charging Starbucks purchases to the new credit card. However, the credit card could encourage some customers to pile up more debt, making that cup of Caramel Macchiato even more costly if the cardholder doesn’t pay off the balance in full each month.

As Americans, we set a U.S. record earlier this year – and again in September – by collectively accruing more than $1 trillion in credit card debt.

This begs the question: We really don’t want to add to the ranks of over-caffeinated, in-debt Starbucks customers, do we?

See related: Goodbye, Starbucks, and your watered-down rewards, Starbucks gift cards are now just a text away, New Uber rewards card is the latest to target millennials

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  • Lucius Croiius

    Wait. I’m trying to follow. Are you bitching about Starbucks offering a credit card or Americans poorly managing their finances? The two are not related. At all.