Deferred Interest, Waived Interest -- Why You Need to Know the Terms of Your 0% APR Offer
Added 01-01-19 10:04:03am EST - “Not understanding how your 0%APR offer works could end up costing you money. Learn what makes deferred interest and waived interest offers different so you know what to expect.” - News.yahoo.com
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Not understanding how your 0%APR offer works could end up costing you money. Learn what makes deferred interest and waived interest offers different so you know what to expect.
If you’ve done any shopping lately or even just turned on a TV and watched a few commercials, you’ve probably seen your fair share of zero-interest offers. Smartphones, furniture, appliances, and home remodel projects are just a few of the many purchases you can make while paying no interest for an introductory timeframe.
Although the concept of zero interest seems simple enough, it’s more complicated than you might think, and there are two very different types of zero-interest offers. Before you decide to sign on the dotted line, you need to know whether you’re getting deferred interest or waived interest, as that can make a huge difference in what you end up paying.
Both types of offers give you the 0% APR for a limited period of time, such as six, 12, or 18 months. The difference is what happens if you don’t pay off your full promotional balance within the intro period.
With deferred interest, the creditor is technically only deferring your interest payments each month until the intro period ends. If you pay off the entire balance within the intro period, then you won’t need to pay any interest. But if you have any of the promotional balance remaining after the intro period, then you’ll be charged interest on the balances you had every month going back to the date of the purchase.
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