A convertible handbag includes a body having front and rear sides and a bottom forming an interior compartment. The body has a bottom portion including the bottom, a top portion, and an intermediate portion connecting the top and bottom portions. The top portion is foldable into and out of the interior compartment to convert the body between a tote and a purse. Each side has a bottom pair of openings in the intermediate portion and a top pair of openings in the top portion. Front and rear continuous-loops of flexible material extend through both the top and bottom openings so that the continuous-loops can be pulled from the top pairs of openings to form loop handles extending from the top openings when the body is a tote and can be pulled from the bottom openings to form loop handles extending from the bottom openings when the body is a purse.