Money Fix: Deferred-interest credit cards
Credit cards get costly when you don't pay your balance in full and pay interest. So it's easy to see the temptation of deferred-interest credit cards offered by national retailers with buy-now and pay no interest -- typically for 12 to 18 months. The trouble is, it can be a trap. Credit: iStock
Credit cards get costly when you don't pay your balance in full and pay interest. So it's easy to see the temptation of deferred-interest credit cards offered by national retailers like The Home Depot, Best Buy and others. Buy now and pay no interest -- typically for 12 to 18 months. The trouble is, it can be a trap.
You could end up paying interest rates from 20 to 30 percent. Read the fine print, because some deferred-interest credit card agreements don't clearly establish when and how interest rates apply, warns Dvorkin.
Simply put, "Buyer beware," says Leslie Tayne, a Melville attorney specializing in debt issues. "Deferred-interest cards are a way to incentivize and lure you into taking on cards that will eventually have a higher rate of interest than other cards once the intro rate expires."
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