Deferred-rate Cards Can Be a Ticking Time Bomb

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published 2 January 2019

If you opened a retail credit card with a deferred-interest plan to save on your holiday shopping, be sure to pay down your balance well before the no-interest term expires. Otherwise, you’ll start 2019 in a world of hurt.

The Best Rewards Credit Cards, 2018

Retail credit cards that entice shoppers with these promotions often bury the catch in fine print: If any amount remains after the deferred-interest period expires—which can be in as little as six months—or you are more than 60 days late in making a minimum payment before the period ends, you can be charged interest retroactively on the purchase price. On top of that, the average rate on retail cards is almost five percentage points higher than average overall credit card rates, reports CreditCards.com.

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Miriam lived in Toronto, Canada, before joining Kiplinger's Personal Finance in November 2012. Prior to that, she freelanced as a fact-checker for several Canadian publications, including Reader's Digest Canada, Style at Home and Air Canada's enRoute. She received a BA from the University of Toronto with a major in English literature and completed a certificate in Magazine and Web Publishing at Ryerson University.