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What you don’t know about store credit cards could cost you


If you want a new TV or another big ticket item for the holidays, retailers are happy to help out.

Store credit card deals offer zero percent interest for six months or more, but experts warn not understanding the terms could create a financial disaster.

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Signing up for a deferred interest credit card has benefits and risks, according to Graceworks consumer credit counselor Lisa Roberts. 

“You do have more time to pay for a purchase but the bad thing is if you don’t pay it off in a certain amount of time then you have all that interest that’s accrued on the account,” Roberts said. 

Those interest charges could add up to hundreds of dollars. 

A new survey from Wallethub finds 85 percent of store credit cards have deferred interest, and 82 percent of people don’t get the basics. 

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“People really don’t understand how it works and they really need to do research just to help themselves better understand so they won’t get themselves in a financial mess,” Roberts said. 

To avoid a hit to your wallet from deferred credit card deals: 

  • only buy items you know you can afford
  • read the fine print
  • plan to pay off the debt early to avoid interest charges

Shopper Lonie Marable of Dayton said she has broken her store credit card habit. “I had one at one time, but the interest rate was astronomical.”

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Richard Hill of Springfield, pointed out another store credit card risk. 

“You pay it off and you still have the credit and you are tempted to use it every time you go in the store,” he said. 

One in five deferred interest credit card uses will not be able to pay off the debt in time to avoid finance charges, according to a study by CreditCards.com.

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