A “no interest if paid in full” offer means deferred interest, not a true 0% rate. Interest builds from the purchase date, and if any balance is left when the promotion ends, you owe all of it. Divide what you owe by one month fewer than the promotion length and autopay that amount.
Put a $2,400 couch on a 12-month plan, pay it down evenly, and come up $100 short at the deadline. By our math, a 30% rate puts roughly $400 of interest on the next bill. That’s the interest on every dollar you owed, every month since the purchase, not just on the $100.
The Consumer Financial Protection Bureau found that about one in five deferred-interest promotional balances ended up charged that back interest.
Store cards, furniture and electronics financing, and medical credit cards commonly run these deals, and the interest builds at the card’s regular rate, often 25% or more. A true 0% intro APR (annual percentage rate) charges no interest during the promotion, and interest starts only on whatever is left once it ends.
The wording tells you which one you have. A deferred-interest offer promises no interest “if paid in full,” while a true 0% offer says “0% intro APR” and nothing about paying in full. Federal advertising rules also make a deferred-interest offer warn that the issuer will charge interest back to the purchase date if you miss the deadline.
Don’t count on the minimum payment, which is usually too low to clear the balance in time. For the couch, $2,400 over 11 months is $219 on autopay, which leaves a spare month in case a payment posts late. Every statement during the promotion has to show the payoff date, so check it against your schedule.
Keep new purchases off the card. Payments above the minimum go to the highest-rate balance first, and the promotional balance ranks as 0% until it expires, so new charges get your extra money. Federal rules redirect extra payments to the promotional balance only in its last two billing cycles. You can ask the issuer to apply them there sooner, though it doesn’t have to agree.
If the payment that clears the balance a month early doesn’t fit your budget, the purchase doesn’t either.
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