Zero Interest Credit Card Can Still Incur Big Interest Charges

Were you hit with unexpected fees or a lump-sum interest payment on a store-brand zero interest credit card? A class action investigation is now responding to consumers’ claims that retailers engaged in deceptive marketing practices to trick consumers into thinking that they are receiving credit with 0% interest forever, only to hit them with large interest fees later on.

It can be hard to resist advertising for a zero interest credit card from one of your favorite stores. However, what many consumers don’t understand is that “no interest” is very different from “deferred interest.” Lawyers are investigating consumer claims alleging that companies intentionally deceive consumers into believing they are really getting a zero interest credit card that stays at zero interest, only to get hit with high interest rates later.

According to a recent study, 72 percent of consumer don’t understand how deferred interest works. Most consumers believe that interest will be charged after an advertised interest-free period ends, meaning that they will only be charged interest on the money left unpaid on the credit card after the promotional period ends.

However, this is not the case. In fact, on a deferred interest card, interest is often charged on the entire amount of a purchase if any amount is left unpaid after the promotional or zero interest period has ended.

This type of agreement is usually indicated in marketing or contract material from a store that states “no interest if paid in full.” However, sometimes this information can be presented in an unclear way, or hidden from consumers in possibly deceptive marketing practices.

Though a zero interest credit card may seem like a good idea, or a way to avoid interest rates associated with a credit card from a bank, store credit cards usually have higher interest rates than bank credit cards. The average credit card interest rate is 13.08 percent, but the interest rates on store cards are usually over 20 percent. Sometimes, interest rates on this kind of card can be as high as 30 percent.

So, if you do have an unpaid balance on a store credit card, you’ll likely be paying over 20 percent interest not just on the unpaid balance, but on the entire purchase. Given that most stores that offer a zero interest credit card are stores that sell big-ticket items, this can be a huge hit to many consumers. Consumers often make the choice to use a store credit card specifically to make larger purchases.

Lawyers are investigating consumer claims that they were misled into believing that a store credit card had a 0% interest rate forever, not for just a promotional period. If you made a purchase with a zero interest credit card and then were charged a large interest fee, you may have been tricked by deceptive marketing practices by a retailer.

Retailers already being investigated for possibly deceptive marketing practices around their zero interest credit card include:

• Apple
• Cabela’s
• Disney
• Dressbarn
• Forest River
• Furniture Row
• Helzberg Diamonds
• The Home Depot
• Kay Jewelers
• Kohl’s
• Lord & Taylor
• Lowe’s Home Improvement
• Menards
• Mor Furniture for Less
• Raymour & Flanigan: Furniture & Mattresses
• Saks Fifth Avenue
• Sears
• Sony/PlayStation
• Zales

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.

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