HOUSTON – Almost every major store has one now. A credit card that comes with a no interest offer.
But not all of those store cards are created equal. Some of them have huge fees for missed payments.
It happens just about every time you go shopping. The clerks ask if you want to open a credit card account, and save money on your purchase. In a lot of cases you don't have to make a payment for six months or a year. But miss that first bill by one day, and you can bet you'll be hit with huge fees.
Editors with CardHub.com ranked nearly 20 major retailers on their deferred interest offers.
They found some are just plain sneaky when it comes to late fees.
Jill Gonzalez of CardHub.com said the findings are based on the hidden penalties buried in the fine print.
"It's definitely confusing and retailers are banking on consumers being boggled by the entire process," she said.
Every retailer's transparency was scored from zero to 10; the more confusing the deal, the lower the score
"None of the retailers got a perfect 10," said Gonzalez. "Seven out of 10 was the highest. Most got a one or a three out of 10."
Macy's ended up with a transparency score of six.
So we checked: their fine print, the high interest and deadlines seemed clear enough.
The late payment penalties for special deals were also listed in paragraph 10.
Nancy Hecht is a certified financial planner and in her view, Macy's' fine print is very clear.
"Macy's has in theirs, in bold, how to avoid paying interest," she said.
But like every other retailer, she said, Macy's doesn't do the math for you.
"Say you charge $500 and you miss it by one day, so you're six months and a day. That $500 and you being late has cost you $122.50," said Hecht. "That's a lot of money as far as I'm concerned."
CardHub's editors gave the lowest scores on transparency to Victoria's Secret and Radio Shack.
Also near the bottom were Amazon and Pottery Barn.
But on the bright side, JCPenny, Wal-Mart, Sears and Home Depot were all near the top of the rankings, giving consumers clear information about late fees.
"Even half of these retailers that offered the deferred interest plan, offer an alternative," said Gonzales. "And that's what consumers really need to be made aware of."
Hecht also recommends if you chose a card with a deferred interest option; make sure you are keeping track of deadlines.
"If you have a card that you're taking out over the holidays, that's offering deferred interest, six months same as cash, I would put an alarm for myself five months from the date that I did this and make sure that I can pay it off then," Hecht said.