How to understand special promotional financing offers on credit cards

Promotional credit cards

How do you tell the difference between a zero interest and deferred, or “no” interest credit card offer?

Look for the “if.” Zero interest offers use language like “0% intro APR on purchases for 12 months.”

Deferred interest offers use language like “No interest if paid in full within 12 months.” The “if” means you could end up paying more than you expected.

Many retailers offer special promotional financing for big purchases through deferred interest offers. These offers promise people that they won’t be charged interest during a promotional period, if they pay their promotional balance in full by the end of the period. Consumers may find the costs of deferred interest less transparent.

Recently, a major U.S. retailer announced it will no longer offer deferred-interest promotions on its store credit card. Instead, it will offer a promotional period with zero percent interest. With this zero-interest approach, you don’t accrue interest charges during the promotional period even if you don’t pay off your balance by the end of the promotional period.

Though deferred interest and zero interest may seem similar, the differences can have big effects on your wallet.

Here’s how these promotions work, and the key differences between them.

The difference between zero interest and deferred interest promotions

A zero percent interest promotion will not add interest based on the balance of your promotional purchase during the promotional period. Even if you still have an unpaid balance when the promotional period is over, you will start to pay interest on that remaining balance only from the date the promotional period ends. This promotion may also require you to meet other terms as well, such as making your minimum monthly payments on time. You may see a phrase like, “0% intro APR for 12 months,” to describe this type of promotion.

In contrast, you might have seen retailers offering credit cards with advertisements like, “No interest if paid in full in 12 months.” Watch out for the “if.” That means the promotion is a deferred interest offer. Deferred interest means that if you do not pay off the entire balance of the promotional purchase you’ve made on your card, then interest going back to the date of the purchase will be added on top of the remaining balance. This promotion may also require you to meet other terms as well, such as making your minimum monthly payments on time.

Let’s break this down. This chart shows you the difference between the two types of credit card offers.

Here’s an example based on buying a $400 TV with a card that has one of these two promotions. In this example you make your payments on time but don’t pay off the whole balance during the promotional period.

Please note the following calculation is just an example. An actual billing statement might be slightly different.


promotional credit cards

Promotional credit cards

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promotional credit cards

Earn one reward point for every dollar spent, with no limits†.

Pay no annual fee***.

0% Intro APR Balance Transfers

Enjoy 24 months of 0% Introductory Annual Percentage Rate (APR) financing on balances transferred from another card within the first 90 days after you open the account *** .

Purchases Enjoy 0% Introductory APR, for the first 12 billing cycles of your account opening.***

  • Over 650 branches and more than 2,000 Santander ATMs across the Northeast, including many CVS/pharmacy ® locations.
  • Online and Mobile Banking.
  • Pay in a simple, secure and convenient way with Apple Pay.
  • Mobile Check Deposit.
  • A Debit MasterCard ® for your everyday on–the–run purchases § .
  • Monitor your balances or activity with customizable alerts.
  • FDIC Insurance coverage up to applicable limits.
  • Online Banking Guarantee §§ .
  • Real-Time Fraud Monitoring.
  • Toll-free number to speak to a Personal Banking Representative.
  • Switch Services team to help if you're moving from another bank.

Love earning cash back and hate paying transaction fees? Bring the best of both worlds to your wallet.

  • Receive 1.5% cash back via statement credit, gift cards or merchandise on net new retail purchases, with no limits on how much you can earn.*
  • No annual, balance transfer, foreign transaction, cash advance, or returned payment fees. ▲▲▲
  • Receive $100 cash back via statement credit when you spend $500 on net new retail purchases within the first 90 days of account opening.*
  • 3% Introductory Annual Percentage Rate (APR) for 12 billing cycles on balance transfers made within 90 days of opening your account. After the introductory period, a variable APR for balance transfers from 15.49% to 24.49%, based on the Prime Rate and your creditworthiness, with a transaction fee for each balance transfer of $0. ▲▲▲
  • Works with Apple Pay.

† Accounts must be in good standing. Applies to new net retail purchases only.

§ Available for Checking account customers.

§§ Please refer to your Online Banking or Personal Deposit Account Agreement for details on your responsibility for promptly reporting unauthorized transactions.

* Bonus Offer Details: Accounts must be in good standing. Applies to net new retail purchases only. Net new retail purchases: qualifying purchases less credits, returns, and adjustments. Balance Transfers, Cash Advances, including purchases of money orders or other cash equivalents, purchases made by or for a business purpose, fees, interest charges, unauthorized/fraudulent transactions, and certain other charges do not earn cash back credit. The cash back balance on your account does not expire for accounts in good standing. Cash Back in the form of statement credit upon your request. Receive the $100 cash back bonus via statement credit: When you spend $500 on net new retail purchases using the Santander ® Ultimate Cash Back SM credit card, or when you spend $1,000 on net new retail purchases using the Bravo credit card, within the first 90 days of opening your account. $100 cash back is credited to customer account within 6 weeks after spending requirements are met. Other terms and conditions apply.

*** Sphere Annual Percentage Rates (APRs) and Fees: 0% introductory APR for 24 billing cycles on balance transfers made within 90 days of opening your account and 0% introductory APR for 12 billing cycles on purchases. After the introductory period, a variable APR for balance transfers and purchases from 13.49% to 23.49%, based on the Prime Rate and your creditworthiness, with a transaction fee for each balance transfer of either $10 or 4%, whichever is greater. There is no grace period on balance transfers. Also if you take a balance transfer offer, this means that unless your purchase APR is at an introductory or promotional 0% APR, you will pay interest on new purchases from the date made if you do not pay all balances, including the promotional balance transfer, in full by the next payment due date appearing on your statement. Cash advance APR of 25.49%. Minimum finance charge of $1.50. The fee for cash advances is $10 or 5%, whichever is greater. Penalty APR of 30.99%, which may apply indefinitely to your account if you miss payments or otherwise default. The foreign transaction fee is 3% of the gross amount of transactions made in a foreign currency and transactions made in U.S. Dollars that are processed outside the 50 United States, District of Columbia, Puerto Rico, or Santander ATMs in Mexico. Purchases of wire transfers from a nonfinancial institution of either $10 or 4% of the amount of each transaction, whichever is greater. There is no annual fee. Rates effective as of 09/01/2017. Rates are subject to change. Credit card accounts are subject to approval.

▲▲▲ Santander ® Ultimate Cash BackSM Annual Percentage Rates (APRs) and Fees: 3% introductory Annual Percentage Rate (APR) for 12 billing cycles on balance transfers made within 90 days of opening your account. After the introductory period, a variable APR for balance transfers from 15.49% to 24.49% based on the Prime Rate and your creditworthiness, with a transaction fee for each balance transfer of $0. There is no grace period on balance transfers. Also if you take a balance transfer offer, this means that unless your purchase APR is at an introductory or promotional 0% APR, you will pay interest on new purchases from the date made if you do not pay all balances, including the promotional balance transfer, in full by the next payment due date appearing on your statement. Variable APR for purchases from 15.49% to 24.49% based on your creditworthiness when you open your account. Cash advance APR of 25.99%. Minimum finance charge of $1.50. Penalty APR of 30.99%, which may apply indefinitely to your account if you miss payments or otherwise default. There is no annual fee. Rates effective as of 09/01/2017. Rates are subject to change. Late payment fee and finance charges will still apply. 1.5% cash back via statement credit, gift cards or merchandise on net new retail purchases with no limits on how much you can earn. Earn $100 cash back via statement credit after you spend $500 on net new retail purchases within the first 90 days of opening your account. This credit can take up to 6 weeks to be processed. Late payment fee and finance charges will still apply. Credit card accounts are subject to approval.