Many Tallahassee residents have no doubt seen credit card companies and stores offer same as cash incentives in which a Floridian can buy a big-ticket item, like furniture, an appliance or even a car, and then pay it off over several months without having to worry about interest.
In theory, this sort of deal works out great for the consumer, especially if he or she manages to pay off the debt by the end of the introductory zero percent financing period. However, it is important for consumers to read the fine print on these sorts of offers.
In some cases, the financial institution is agreeing to "waive" interest for several months, meaning that the loan is truly interest free. Unfortunately, other institutions agree only to defer interest, meaning that if there is a balance at the end of the promotional period, interest will accrue, usually at a high rate, all the way back to when the customer first made a charge on the card.
As this blog has reported previously, credit card companies must be candid about the terms of the products they are offering. Therefore, in order to avoid any confusion about deferred versus waived interest, a customer should ask for, and read, the terms of the credit card offer before signing up, if doing so is at all possible.
Still, this can be a nasty surprise for a Florida customer, as it could mean hundreds of dollars in additional credit card debt suddenly appearing on one's statement simply on account of interest charges. When this happens, it can leave a person in a financial bind, especially if the person has other bills to pay or has experienced a recent job loss or medical crisis. In these sorts of situations, it may be necessary to use bankruptcy as a means of paying down credit card debt.