CONSUMER AFFAIRS: Deferred interest rate credit cards

2014-03-07T12:46:00Z 2014-03-07T19:58:14Z CONSUMER AFFAIRS: Deferred interest rate credit cardsJoseph Pellicciotti Times Business Columnist
March 07, 2014 12:46 pm  • 

The Consumer Financial Protection Bureau’s Eisenhower and Yang write in a Feb. 6 blog about deferred interest rate credit cards and health care providers sometimes suggesting the cards as patient payment options (“What’s the deal with health care credit cards?” at

Deferred interest rate credit cards are used as options in many commercial venues, not just in health care. They can be useful, but consumers should understand how they work.

Deferred interest rate cards are not the same as zero percent introductory rate credit cards, which generally result in no interest charged on balances during the introductory period. The consumer is charged interest on balances after the introductory period ends.

However, with deferred interest rate cards, if the promotional period ends with an unpaid balance remaining for a purchase, you’ll be charged interest on your balance for each month, starting from when you first made the purchase.

For example, an unpaid balance on a $1,000 purchase made six months ago could result after the promotional period in interest charged on the total $1,000, even though the balance was brought down considerably. Hence, the term “deferred interest.”

The authors urge consumers to pay timely and to make sure to pay off balances by the end of the promotional period.

Making minimum payments will not likely be enough to pay the balance off by the end of the promotional period. Pay more than the minimum and/or save up enough to pay the final amount before the promotional period ends.

Opinions are solely the writer's. Pellicciotti is an Indiana University Northwest faculty member and administrator. The article is for informational purposes only and not intended as specific advice. Consult your professional adviser before taking action. Author does not endorse/guarantee content within websites.

Copyright 2014 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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