Buy now & pay later... It sounds like a deal!
Deferred interest credit cards are advertised as free credit cards that shoppers can get right on the spot. They are offered by major retailers, such as Walmart and Home Depot. So, if you want to buy a computer but don’t have the money, here is a $1000 credit card. You automatically get approved, and you even get 0% interest for a specified term! Deferred interest cards seem like a dream come true for shoppers who don’t have the money to buy what they want. They can worry about paying later.
But deferred interest credit cards can be quite dangerous to consumers. These cards charge very high interest rates and have hefty fees. If not paid back in time, consumers can find themselves high in debt. For most deferred interest credit cards, if you miss a payment, you can get charged an average of 25% APR on the full amount of your purchase. This is ridiculously higher than most APRs. In addition, there is no forgiveness for the debt, and many times, consumers are not even warned of the high interest charges ahead of time. There is no full disclosure when they get the credit card, so they are surprised to receive such high rates when they receive the notification in the mail.
So, be careful before getting a deferred interest credit card. They might seem like a great way to save, but in reality, you may end up stuck in a lot of debt!
