More Consumers Express Frustration With 0 Interest Credit Cards

A growing number of consumers are expressing their frustration and considering participation in a class action investigation because of 0 interest credit cards. Consumers say they have been burned by a line of credit or credit card, frequently attached to a big retail purchase, that was promoted as charging no interest if paid in full.

These 0 interest credit cards initially seem appealing to prospective users, but unfortunately, more financial professionals say that that these deals are often a trap.

While these 0 interest credit cards are frequently promoted during the holiday season, they are often available at many different stores. What initially seems like a good deal at the time could generate a lot of fees in the future, leaving customers to feel like they’ve been duped into purchasing a store card with bad terms.

Many store credit cards defer the interest rather than waive it, which some consumers allege is misleading. The distinction between deferred and waived interest is dramatic.

Unfortunately, nearly three-quarters of consumers don’t understand how deferred interest works, according to reports, meaning that signing up for these 0 interest credit cards can unknowingly put them in a difficult situation. Many consumers assume that the interest will be charged on the balance once the promotional period ends. However, there are four common reasons why more consumers are getting confused and being burned by these 0 interest credit cards.

First of all, store credit cards usually do not come with risk-based pricing. This means that everyone will get the same rate even if they have an outstanding credit score.

Another common challenge with 0 interest credit cards is that store credit cards usually have higher APRs. The average credit card has an interest rate of thirteen percent, whereas store credit cards typically have rates above twenty percent.

A third reason why there are risks associated with 0 interest cards is that interest is not waived and usually deferred instead.

This introductory 0 percent interest rate just means that the interest is waived to the future, meaning that you must pay off the full balance prior to the end of the promotional period. If you don’t, you will be charged retroactive interest from the purchase date at a very high rate assessed by the store.

Finally, out of store spending can help to protect your promotional balance. If you continue to make purchases, your extra payment beyond the minimum due would go towards the balance that has the highest APR. This means that the payment would be applied towards new purchases first because it would be at the standard purchase APR rather than the promotional balance assessed at a different interest rate.

A traditional credit card with a zero percent purchase offer may be valuable for consumers, but only if it comes with a complete waiver of interest fees. This is why it is important to read the fine print when you are opting to select a new credit card. Anyone who has been burned by 0 interest credit cards may be eligible to participate in a class action investigation.

Join a Free Zero Percent Store Credit Cards Class Action Lawsuit Investigation

If you were unexpectedly faced with high interest charges on a store credit card even though you made the purchase on a 0% interest store branded credit card, you may be entitled to compensation.

Learn More