Daily Home Renovation Tips

We have written about this previously when we noticed what we thought was a VERY disappointing financing practice by credit cards of retailers. Well, we now have the proof.

The details are below. They come from our own deferred payment financing with a big box retailer’s credit card (it’s actually issued by a big bank under the branding of the big box store). The terms and numbers are what are actually used on the monthly credit card statement so you can look for the same terms on your statements. We would show you a picture of the recent statement we’ve received but that would (A) give away who the big box retailer is and (B) show you some confidential information.

• Purchased $2,409.76 on July 4, 2007
• No payments or interest charges for 6 months (sound familiar?)
• Expiration Date January 3, 2008
• Annual Interest Rate - 28.8%
• Accrued Interest Charges* - $315.59 (as of December 16, 2007)
• *To avoid paying accrued interest charges, you must pay off your plan balance by Expiration Date shown.

OK, so from the above, we have to pay $2,409.76 on or before January 3, 2008 or get hit with a 28.8% financing charge right?

We received the latest monthly statement from the big box supplier’s credit card with the following information:

• Statement Date - December 16, 2007
• Payment Due Date - January 10, 2008
• Minimum Payment Due - $0.00
• Current Activity - None

Yes, that’s right! the minimum amount we have to pay is $0.00. This is showing at the top of the statement. Where are the details of the 6 month deferral plans? Well, they are at the bottom of the statement. Who looks at the bottom of the statement? And how large is the print for top part of the statement vs the deferral plan section? I’ll tell you. The print for the top part of the statement is twice as large.

So, if you were in a holiday rush, or at any time of the year, if you see Minimum Payment due of $0.00, would you really look at any other part of the statement? Doubtful.

If we don’t remember to pay the $2,409.76 by January 3, 2008 (7 days before the statement’s Payment Due Date) we will have to also pay all that interest on the next month’s statement.

Don’t let this happen to you. Look at the details of your retailer branded credit cards, and all your credit cards.