Deferred interest calculator

Many store cards and retail financing plans offer "no interest if paid in full" within 6 to 24 months, often on furniture, appliances, electronics and mattresses. Interest is still worked out from the day of the purchase, but it is held back. If the whole promotional balance is paid by the deadline, it is not charged. If any amount is left, even a few dollars, the interest that built up since the purchase can be added to the account.

The card applies its deferred-interest APR, often well above 20%, to the promotional balance from the purchase date. Because payments shrink the balance, the interest builds a little more slowly each month. This calculator uses the same idea month by month, so it is an estimate: issuers may use daily balances, actual payment dates, compounding and their account's specific interest-calculation method, and the figure on a statement depends on your balance and payment history.

Divide the promotional balance by the number of payments left and round up. That gives a simple monthly payoff target. The minimum payment printed on a statement is often lower than that, so paying only the minimum can leave a balance at the deadline. Aiming to finish one billing cycle early leaves room for payment timing, rounding, or a small final balance that would otherwise put the promotion at risk; the calculator shows that one-month-early figure too.

No. With a true 0% APR offer, interest starts only on whatever is left after the offer ends. With deferred interest, the interest from the whole promotion is added if anything is left. The two can look alike in an advertisement; the card agreement says which one it is.

If the card carries other balances, the issuer decides how payments above the minimum are applied, and that can leave the promotional balance unpaid. The card issuer can say how payments are applied and whether a payment can be directed to the promotional balance. Your card agreement and statements are the authoritative figures.