Tuesday, June 20, 2017


“Deferred-interest” credit cards are different from zero interest credit cards. A zero-percent interest credit card will not add interest to the balance of the purchase made during the promotional period, until after that period is over, and the balance is not paid. 
In contrast, deferred-interest cards charge interest from the time the consumer originally made the purchase, which can lead to much higher interest charges (especially when many cards charge rates of 25% or higher).  
This is because a deferred-interest card company charges consumers accrued interest on the entire promotional balance from the time they made the purchase, even if that charge has been nearly (but not completely) paid off! 
For example, a customer might use a deferred-interest card to make a $1,000 purchase. The promotional period may last, for example, one year. If the customer pays back all but $100 of that amount, she would still be charged one full year’s worth of interest on the entire $1,000 charge!  And since many retail deferred-interest cards have interest rates of 25% or more, those charges could be very significant!
many retailers use credit cards with deferred-interest promotions. What’s worse, customers may open one of those cards to finance a big purchase, and many use terms in their marketing such as “special financing” or “same as cash if paid in full.” A 2016 survey from CreditCards.com found that nearly half of retail-branded credit cards carry an APR of at least 25%, much higher than the 15.18% national average for all credit cards.  Add that together with the fact that many of these cards are used to buy large purchases, which are not commonly completely paid off within the promotion period, and you have a recipe for financial disaster!

Check out more valuable information about Guam's Laws and working with Mark Williams, Guam's Best Lawyer, on Dededo Law Office's website, www.GuamLegal.com.

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