25 Credit Card Mistakes You’re Probably Making

Mistake No. 5: Not understanding “deferred interest” concept

Store credit cards — ones that you can only use at the store that issued them — frequently have a “deferred interest” policy. Here’s how it works and why you need to be careful with it: The card offers to let you buy something for “zero interest” if you pay it back within a certain period. Imagine that you buy a $1,000 laptop and pay off $900 of it within the zero-interest period. Great. You’re probably assuming that you’ll now start paying interest on the remaining $100 that you owe.

That’s how it works sometimes, but with a “deferred interest” scenario, you would instead suddenly be charged interest on the entire $1,000! That could cost you a lot.

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