Thursday, October 6, 2011

Sears Financial Makes a “No Interest with Minimum Payments” Offer

We’re accustomed to “don’t pay for a year” offers that trap people who can’t pay in full after the year is up. These people end up paying very high retroactive interest back to their purchase date. Sears Financial seems to have created a similar offer for their credit card.

With their offer, if all goes smoothly you can make just minimum payments each month without paying any interest. However, they are careful to say “interest will accrue on the financed amount from the transaction date at the rate then in force for purchase transactions but will be waived if you pay the financed amount ... in full on or before the Promotion End Date.”

There are three ways that you could be hit with retroactive interest (32.9% for me) back to your purchase date:

1. You fail to make a minimum payment.
2. You fail to pay the remaining balance when the promotion ends.
3. A mysterious “Promotion Termination Event” occurs.

This offer is just an attempt to drag the unwary deep into high-interest debt. Don’t be fooled.


  1. Wow, is that even legal? I thought there were supposed to be rules coming in for clarity in CC billing.

  2. @Melanie: Unfortunately, this will likely not frighten enough of the people who are most likely to get trapped.

    @Anonymous: You can bet that credit card companies will be working furiously to get around any legislation that cuts into their profits.