In some dim and dusty era long ago, many retail stores offered store charge cards that let customers charge their purchases and then pay the bill at the end of the billing cycle. No credit, just convenience.

Some retailers now offer their own store credit cards, and while some offer good deals for customers, others can be problematic, especially if the card offer includes something called “deferred interest.”

Researchers at WalletHub reviewed the offers on 140 different store cards, looking at everything from average annual percentage rate (APR) to reward programs. In general, comparing offers being made this year to those from last year, the differences are small. For example, in 2015 38.4% of the offers included an introductory 0% APR on new purchases; this year the percentage has dropped to 37.93%. Ongoing rewards are up about 0.3 percentage points to 46.9% of cards making the offer.

In the rewards category, just 6.9% offer cash discounts while 40% offer points. The average cash reward for both years was 2.9% and the average points reward was 2.38.

If you don’t pay off the card balance every month you’ll want to check the average APR once the introductory period elapses. This year’s average is 26.72% compared with 26.69% a year ago. The APR range is 12.99% to 29.99% this year compared with a range of 11.15% to 29.99% last year. Here’s the kicker with interest rates: every one of the cards that has an initial 0% interest rate also has a deferred interest rate.

Deferred interest (that is, the 0% rate) is usually limited to a specified number of months and could lead to unexpected consequences if you miss a payment or have a balance remaining when the promotional period ends. WalletHub gives this example:

Suppose, for example, that you’re interested in opening a new credit card account to finance a couple of big-ticket items from your child’s Christmas list. And let’s say they cost a total of $800, an amount you think you can repay within six months in the absence of interest. But things happen, and it ends up taking you seven months instead. With a normal 0% credit card, which would assess interest only on whatever balance remains at the intro term’s conclusion, you’d end up paying about $2 in interest (assuming a 20% regular APR). But with a deferred-interest credit card, you’d be on the hook for roughly 27.5 times that amount (i.e. $55 in interest).

The five cards WalletHub determined to be the best are Amazon’s Store Credit Card, the Toys R Us store credit card, the TJX store card, the Gap store card, and the Target store card. Full details on these cards is available at the WalletHub website as are details on many cards that offer a 0% introductory interest rate with a deferred interest feature.

 

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