With all the Black Friday and Cyber Monday deals out there, it can be tempting to sign up for a store credit card that promises a 0% interest rate for the first few months.
But those “deferred interest” deals can rack up big fees if you end up with a balance or miss a payment. In fact, some retailers’ offers stipulate that even if your balance at the end of the introductory period is just a few dollars, they will be able to charge you interest on the full original purchase amount.
And that interest can be at a whopper rate. The APR on store cards is about 25% — almost double the lowest rate on the Citi Double Cash, one of MONEY’s 2016 Best Credit Cards for cash back.
WalletHub’s 2016 Store Card Landscape report, which analyzed financing options from 75 large retailers, found over two dozen major retailers offering what it called “dangerous” deferred interest plans. Be sure to read the fine print carefully: While WalletHub found Apple, JCPenney and Kay Jewelers were the most transparent about their financing terms, it put Pottery Barn and West Elm (which charge regular interest rates of almost 27% and 24%, respectively) as among the least transparent.
If you are sure you won’t carry a balance, there are a few standout retail cards that are worth picking up during this holiday shopping season. MONEY found that the Target REDcard, which offers free shipping and a flat 5% off on all purchases, is a good option. (WalletHub noted that Target, like Kohl’s, Costco and the Gap, does not offer any deferred interest deals.)
The Amazon Prime Store Card and Gap Credit Card, both of which give the equivalent of 5% back at those retailers, also offer a couple of extra perks to shoppers — although to get the Amazon deal, you’ll need to sign up for a Prime membership, which costs $99 a year.