Deferred interest could cost Kansans big according to new report

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Published: Nov. 22, 2022 at 9:05 AM CST
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TOPEKA, Kan. (WIBW) - According to a new report from WalletHub, deferred interest could cost Kansans big this holiday season.

With high inflation, WalletHub.com says financing offers may be tempting during the holiday shopping season this year. This means “deferred interest” will be commonly found in the fine print of retailer payment plans - which can be particularly dangerous.

WalletHub said deferred interest financing is like a wolf in sheep’s clothing as enticing offers are paired with “no interest if paid in full” or “special financing” to allow the deal to turn ugly if shoppers make the slightest mistake.

WalletHub noted that deferred interest means shoppers pay no interest or a reduced rate for a period of time, however, it does allow the possibility that a high regular APR could retroactively apply to the entire original purchase amount. If a month’s bill is paid a day late or $1 is even owed when the promotional period ends, it said the deferred interest clause could be triggered which activates high-interest charges.

To help shoppers avoid such an unfortunate financial surprise, WalletHub said it evaluated the financing options available from 72 large retailers.

The report found that 58% of Americans are more likely to apply for a store credit card to get 0% financing than a store discount while 54% are unsure how deferred interest works. It also said 67% of people who understand how the move works think it is unfair as 74% say they would negatively view a store that charges deferred interest. Meanwhile, three out of five Americans indicated that deferred interest should be illegal.

WalletHub found that the following stores do not offer deferred interest: Walmart, Target, Costco, Kohl’s, AutoZone, Hobby Lobby, Nordstrom, Apple, Barnes & Noble, Advance AutoParts, Potterybarn, Meijer, Army and Airforce Exchange Service, GAP, Belk, American Eagle, West Elm, Neiman Marcus, Dillard’s, Bass Pro Shops, Saks Fifth Avenue, Men’s Wearhouse, TJX, Tiffany & Co., True Value, Abercrombie & Fitch, Cabela’s, Williams Sonoma and Cato.

The report found the following stores may offer deferred interest in the future: GameStop, Ikea, Designer Shoe Warehouse, Forever21, Burlington, BJ’s, Macy’s, Ann Taylor and Victoria’s Secret.

Meanwhile, deferred interest is offered in the following stores:

  • Dick’s Sporting Goods
  • Brand Source
  • Home Depot
  • JC Penney
  • Menards
  • Sears
  • Dell
  • Pier 1 Imports
  • Wayfair
  • Big Lots
  • Pep Boys
  • Guitar Center
  • Kay Jewelers
  • Staples
  • Zales
  • Amazon
  • Lowe’s
  • Best Buy
  • Q
  • Tractor Supply Co.
  • Office Depot OfficeMax

To read the full report, click HERE.