Home Consumer Holiday Shopping – The Retailers with the Sneakiest Financing Offers

Holiday Shopping – The Retailers with the Sneakiest Financing Offers

 By Mark Young, SouthFloridaReporter.com Managing Editor, Nov. 2, 2015 – As you prepare your holiday gift giving list, you should also prepare yourself for the costs. Most of us will pay by credit card. Often retailers will have a special promotion if you get one of their credit cards but before you do swipe that card, check out the financing terms. CardHub did just that and you might be surprised by what they found:

By Alina Comoreanu, Research Analyst, CardHub, Nov. 2, 2015 – With the average consumer expected to spend roughly $834 this holiday season and credit card debt projected to rise by a net $60 billion by the end of the year, financing options are likely to be in high demand. With that in mind, CardHub released its 2015 Deferred Interest Report in order to shed some light on the dark side of holiday financing, which can end up costing consumers over 27 times more than they expect to pay.

NOTE: The information in this report was current as of Oct. 12, 2015

Deferred interest plans are typically marketed as offering 0% introductory terms, but they come with a catch that distinguishes them from normal 0% credit cards. If you leave an unpaid balance of even $1 at the end of the introductory period or you miss a single payment, interest will retroactively apply to your entire original purchase amount. Thus, what you initially thought was a great deal could quickly devolve into a holiday nightmare.

Key Highlights

  • 73% of major retailers offer financing options to their customers. Of the major retailers that provide financing, 47% currently offer a deferred interest plan.
  • Some big-name retailers – including Apple, Macy’s and TrueValue – are among the least transparent about their use of deferred interest financing.
  • Despite not having a deferred interest plan themselves, several retailers allow consumers to make payments through PayPal, whose “Bill Me Later” option has deferred interest.
  • Disclosures are improving, evidenced by the average CardHub Transparency Score increasing from 6.9 in 2013 to 7.8 in 2015.