How to watch out for deferred interest
RICHMOND, Va. (WWBT) - Have you ever signed up for one of those store credit cards to get the immediate 20% off? Watch out for deferred interest. The store offers a low introductory interest rate which is a great deal, but only if you can pay it off on time.
Those who can’t get slammed with high-interest charges. A new survey by Wallethub found that often these store credit cards come with a 0% annual percentage rate.
They give you a time frame to pay it off and if you don’t, that APR can shoot up significantly. Rates like 28% or more.
It’s a common practice more than half of all major retailers have deferred interest cards. Many shoppers are tempted by the initial discount they get by signing up for store cards. The average discount is 18% on that initial purchase.
But if you don’t pay it off on time, the interest you pay will far outweigh that first purchase discount you got.
If you have a deferred interest card and are worried you may get hit with these charges, set up an automatic payment plan to ensure the balance is paid before the end of the introductory promotional period.
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