Deferred Interest Promo Cost Calculator
Enter your balance, the card's regular APR, and the promo length to see the retroactive interest at stake.
Result
How it is calculated
The tool charges simple interest on the whole original purchase for the whole promo period: retroactive interest = balance × APR ÷ 100 × months ÷ 12. The total owed if the promo is missed is balance + retroactive interest, and the payment needed to clear it in time is balance ÷ months. The APR to enter is the card's regular rate that would be applied back to the purchase date, not the 0% promotional rate. The promo length must be a whole number of months, from 1 to 120, and the APR must be above 0 and no more than 100; values outside these limits, or a balance of zero, show no result. The tool does not compound the interest, reduce the balance as you pay, or add fees, so it shows the worst case of an untouched balance; the card's own statement figure may differ.
Worked example
You buy furniture for $2,400 on a card with a 12-month deferred-interest promotion, and the card's regular APR is 29.99%. If the balance is not fully paid by the end, the retroactive interest is 2,400 × 0.2999 × 12 ÷ 12 = $719.76. The total owed becomes 2,400 + 719.76 = $3,119.76. To avoid it you need 2,400 ÷ 12 = $200.00 a month, paid in full before the deadline. Paying $190 a month would leave a balance, and the interest on the full $2,400 would be charged.
Common mistakes
- Entering 0 as the APR because the promotion is called interest-free. The calculation needs the card's regular APR, the rate that is charged back if you miss the deadline, and a zero APR returns nothing.
- Assuming the interest applies only to what is left unpaid. With deferred interest it is charged on the original purchase for the whole promo period, which is what this tool shows.
- Entering a promo length such as 18.5 months or a day count. The promo period must be a whole number of months, so convert it first; 12.5 shows no result.
- Dividing the balance by the months and stopping there. The monthly figure is the amount needed to clear it by the end date, and the card's minimum payment is often lower, so paying only the minimum can leave a balance.
- Treating the figure as an exact bill. The tool uses simple interest and ignores compounding, partial payments and fees, so the issuer's number may differ.
Sources
- How to understand special promotional financing offers on credit cards — CFPB (archived blog)
About this calculator
Deferred-interest promotions — common on store credit cards for furniture, electronics and medical financing — advertise “no interest if paid in full” within a set promo period, but the fine print matters: interest actually accrues from the original purchase date at the card’s regular APR, it’s just waived if you clear the balance before the deadline. If even a small balance remains when the promo ends, the issuer charges retroactive interest on the entire original amount for the whole promo period, not just on the leftover balance.
This is very different from a standard 0% APR offer, where interest simply starts accruing going forward after the promo ends. Consumer advocates and credit counselors warn about deferred-interest cards for exactly this reason. Before you lean on a “no interest” offer, enter the balance, the card's regular APR (the rate that is back-dated if you miss the deadline, not the 0% promo rate) and the promo length in months to see the back-dated interest that would land on you if the balance is not cleared in time.
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