Don’t get clobbered by ‘no interest’ credit offers

Don’t get clobbered by ‘no interest’ credit offers
It's a mighty tempting offer: buy now -- on credit -- with no interest for up to 18 months!

Before you take the plunge make sure you understand a deferred interest offer works.

You get zero percent for a specific time period, sometimes six months, a year or longer.

But if you miss a payment or have any balance left at the end of that grace period, you get clobbered.

Odysseas Papadimitriou, CEO of the website CardbHub.com, explains what happens.

"Then they go back to the original purchase date and then assess you interest as if you never had the zero percent and they usually do that at the rate of 20 percent."

That's right, with these deferred interest programs you could be hit with interest on part of the balance you already paid.

What's does Papadimitriou suggest?

The best way to avoid this trap is to avoid any financing from retailers and instead rely on traditional zero percent interest rate credit cards."

For more information

Credit Card Deferred Interest Study