The Risks of Deferred Interest Credit Card Promotions

A recent study by WalletHub found that 62% of Americans believe that deferred interest payment plans should be illegal. Deferred interest plans, offered by big-box retailers, promise no interest on purchases if paid off within a certain period. However, if even a dollar of debt remains at the end of the promotional period, the consumer is suddenly responsible for the full deferred interest, often at high rates. Many major retailers offer these plans, while others, like Walmart and Target, do not. Consumer advocates argue that these plans are designed to be complicated and trap vulnerable consumers.