![]() But this means that the balance under the deferred-interest plan may never decrease because no payments are being applied to it. By law, credit card issuers generally must first apply your payment to the balance with the highest Annual Percentage Rate (APR).įor example, if you make the minimum monthly payment and you have one balance with a 15 percent interest rate and another balance under a deferred-interest plan (a rate of zero percent), all of that payment should go to pay down the balance with the 15 percent rate. Also, keep in mind that later purchases not made under a deferred-interest plan would not have the interest delayed. This separation of balances on the same credit card is also important for how your card payment is applied. What You Can Do: As noted, if you want to avoid paying interest, pay off the entire deferred-interest balance by the end of the promotional period. #MINBOX 2017 FULL#Germain, an FDIC senior consumer affairs specialist. “However, if at the end of the deferred-interest period you don’t pay off the balance in full or any of your payments are late, you may have to pay all of the interest that would have accrued from the date of purchase, and that can be expensive.” “Deferred-interest payment plans can be a good deal if you want to make a large purchase but you think you’ll need several months to pay off the debt,” said Heather St. One example is a “deferred interest” promotion offered with a credit card that delays interest charges on certain purchases for a specified period of time - typically six, 12 or 18 months - but only if you make a minimum payment each month and pay the balance in full by the due date. You've probably seen or heard of incentives to convince people to apply for a new credit card or switch from one card to another. What do I need to know about these types of offers? I want to apply for a credit card that is advertising no interest payments on certain purchases for six months. This edition of FDIC Consumer News offers examples of common questions received from consumers and tips for solving and avoiding problems. We also provide helpful information - directly to individuals and at - about consumer protections and how bank customers can minimize difficulties in the future. For complaints against banks that the FDIC does not supervise, the FDIC will make a referral to the appropriate federal regulator. In that regard, the FDIC makes certain that any potential fraud or concerns about “safety and soundness” or consumer protections are shared with our supervisory staff, as necessary, prior to a bank examination. When investigating complaints and inquiries about the financial institutions the FDIC supervises, we seek to ensure that the banks have complied with applicable consumer protection laws and regulations and adhered to proper banking practices. The FDIC has specialists dedicated to analyzing and investigating issues raised by the public. The FDIC hears from thousands of consumers each year who call or write with questions or concerns about banking matters and products such as mortgages, checking accounts and credit cards. FDIC Consumer News - Winter 2017 From the FDIC Inbox: Our Answers to Common Financial Questions Tips on what you can do to avoid mistakes and protect your money ![]()
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