A Bad Idea: Lunch on Your Star Card

So, I was at the exchange today, and as I trudged across the icky, snowy, wet parking lot, something caught my eye.  “Earn your free lunch twice as fast”  (or something similar) shouted the window banner.   Oh, I like free lunch!  I got a little closer to read more.  “Double punches if you pay with your Military Star card.”  It took me a minute, and then it hit me.

What?  AAFEs is encouraging people to charge fast food?  For 99% of the people out there, this promotion is a stupid idea.  Nearly every financial educator on this entire planet will advise you to never, ever use credit to pay for something consumable.  If you ever carry a balance from month-to-month, every purchase increases the amount of interest that you pay.  With the magic of compounding interest, it will take almost no time before the interest you pay on lunches exceeds the value of your “free” lunch.

I didn’t read the details on the sign, and I didn’t go in and ask, because I was sure that I could find that information online.  I’ve looked everywhere and I can’t.  Next time I’m at that base, I’m going to get more details and do the math.  I think we’ll all be astounded at how truly awful a promotion AAFES has managed to put together.  In the meantime, don’t do it.  Please.

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.
  • Paul

    I have to agree in part with Kate, however if you pay off your card at the end of every month by managing your budget and not buying something if you can’t pay, then there’s no interest charge or harm in charging anything,including fast food.