The Retail Rip-Off That Could Ruin Your Holidays

If it sounds too good to be true, it usually is.

Fiscal Times

By Beth Braverman
October 20, 2015

No-interest financing offers from retailers can look really good as you rack up the holiday shopping bills.

Always consider the credit implications before signing up for any new credit accounts, but especially if you see one promising “deferred interest,” which generally offers no interest for a set period of time and then a higher interest rate.

Here’s where the fine print comes in: If you leave an unpaid balance of as little as $1 at the end of the introductory period, or if you miss a single payment, the interest will retroactively apply to the entire original purchase amount.

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While overall transparency about these policies is getting better, the report claims that some of the largest retailers who have deferred interest—including Apple and Macy’s—are among the least transparent about the plans.

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Even retail credit cards that don’t offer deferred interest can be a bad deal. Retailers’ cards charge an average rate of 23.43 percent, far above the 15 percent average for all cards, according to a separate report from CreditCards.com.

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