Consumer Reports: Deferred-interest credit card warning - wistv.com - Columbia, South Carolina |

Consumer Reports: Deferred-interest credit card warning

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MEMPHIS, TN -

(WMC-TV) - Buy now, pay later offers on big purchases sound great, but you will pay alright... in interest charges. Bottom line... there are pitfalls to deferred-interest credit cards.

Doug Watts says buying his televisions with a deferred-interest credit card from Best Buy was one of the dumbest moves he ever made.

A nasty surprise came in the mail when the three-year promotional period was up.

"They added $1,300 in interest on a balance of roughly $700 to $800," said Watts.

The original receipt Watts signed contained loan terms he says were hard to find and unclear. But they said if he did not pay everything off in three years, he would be charged interest on the entire bill - even on the money he had already paid.

Attorney and financial expert Christina Tetreault says although the terms of deferred-interest cards have recently gotten clearer, you can still get trapped.

"The disclosures on these cards are really not enough to help consumers understand what they're actually buying," said Tetreault.

In addition to Best Buy, Home Depot and Walmart, as well as other retailers promote deferred-interest loans.

You will also find solicitations for deferred-interest credit cards designed for health care expenses in doctors' offices, a setting where people struggling to pay for care could be most vulnerable.

"The very location of the solicitation within a doctor's or a veterinarian's office or a dentist's office is inherently exploitative," said Tetreault.

Consumers Union, the advocacy arm of Consumer Reports, says deferred-interest cards, while legal, are dangerous financial products and often carry high interest rates.

As for Doug Watts, he says he will never fall for another deferred-interest credit pitch again.

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