As the holiday season approaches, many Wisconsin retailers will be offering their customers great deals. Exhortations to “buy now, pay later” will be seen in many stores. This kind of offer enables consumers to make big purchases that they can pay off over a span of years. People should be wary about these great offers, however, because they can create financial challenges and lead to high credit card debt.
For example, one man applied for a Best Buy credit card that deferred interest. With the card in hand, he took advantage of some great offers and purchased some televisions. At the end of the three-year promotional period of deferred interest rates, the man received an e-mail notifying him that an additional $1,300 in interest had been added to his account balance of about $800. The e-mail also advised that if the man failed to pay the loan in full, the interest would be charged on the entire amount of the original purchases.
A deferred-interest credit agreement is a retail marketing scheme designed to attract customers to the retailer and to make a hefty profit for the bank or credit card company. However, consumers who fall victim to such deals too often can end up in overwhelming debt. When people fall into the deferred interest trap, the resultant financial disaster can affect a person’s life dramatically.
Thankfully, there is a legal solution to falling into debt: Chapter 13 bankruptcy. In Chapter 13, debtors repay their debt or some percentage of it according to an appropriate and manageable payment plan. As long as they make their payment every month for the term of the plan, creditors may not dun them. At the end of plan, they are debtors no longer and able to start their financial life anew. To start the process, all they need to do is make a call to a bankruptcy attorney.
Source: Kfor, “Consumer Reports: Don’t Get Trapped by Deferred-Interest Credit Cards,” Nov. 05, 2013