3 On Your Side: Interest-Free Offers

PHILADELPHIA (CBS) – Are you planning on making any big purchases soon?

Those interest-free offers we see advertised from time to time can certainly save you a lot of money, but you better take along a
magnifying glass when you shop. Not paying attention to the fine print can cost you big.

There was no question Justin Miller has a big comfortable bed.

“The bed is great. We love the bed,” said Miller.

It’s how he financed the Tempur-Pedic mattress that’s keeping him up at night.

“We could obviously pay up front or they had this special deal,” said Miller.

The deal was a Citibank credit plan offering 12 months interest free on their $5,600 purchase.

“No interest for a year, is a great deal. It sounded good,” said Miller.

But after he made what he thought was his 12th and final payment, along came a bill from Citibank for $1,300 including a year’s worth of 25 percent.

“I thought this is crazy. Either this is some kind of joke, or some kind of scam,” said Miller.

It turns out Miller’s one year interest-free deal expired on December 2nd, 2010. It says so in this tiny type on his monthly statement.

But what Miller considered to be his final payment was due on December 6th, four days later!

“So, the statement due date was different from what they call the plan due date,” said Miller.

Miller believes that’s intentional, a trap to fool customers into making their last payment after the interest free deal expires.

“You should always read the fine print, know the terms and conditions,” said Anita Brown with Consumer Credit Counseling Service.

Brown suggests paying the balance over 11 months.

“Just to be on the safe side, and make those payments over those 11 months so that you’ll be sure to pay that off in the 12 month promotional period,” said Brown.

Citibank says, “The terms of the deal are clearly explained in the seven-page contract”.

Justin Miller doesn’t think so. He’s telling his story on Facebook and hoping to get the last word.

“I’m never going to do business with Citibank again,” said Miller.

Banks rarely go out of their way to notify you that your interest free deal is about to expire.

Miller managed to convince Citibank to “reduce” that penalty interest charge from $1,300 to $650. When asked what happened here, Citibank refused to discuss the specifics, but low and behold they agreed waive the entire interest charge.

Watch the video…

Reported by Jim Donovan, CBS 3

  • Steve

    Bottom line here is dont sign if you dont read. If you dont understand what your signing then dont sign. Cant feel bad for people who dont value their signature until after they get into a contract. Plan ahead. If you have 12 mths to pay with no int then do it in 11 1/2 this way you dont cut it close. No one complIns when theyre able to buy the big screen tv on the banks dime or buy that mattress. Nope not until its time to repay. Please already. Its called responsibility and owning up to your obligations. Count 12 months from the date of purchase and theres your date!

  • UmOK

    Grow up? If the promo end date and statement end date are within a few days of each other, I’m sure many people would’ve had the same issue. You don’t think that seems too convenient for the banks? You must work for CitiBank!

  • jimdonovancbs3

    Thanks everyone for posting comments on this story. But let me make this perfectly clear. The man in our story was NOT late paying his bill. He paid on time. However the billing cycle was set up by Citi so that the 12th payment that should have paid off the interest free loan was due four days after the interest free period expired. Was it intentional? Your guess is as good as mine. Jim Donovan

    • Warren William Stouch

      Good morning, Mr. Donovan,

      I believe that Citi bank did in fact TRAP this man into a default payment, just to apply interest to his account. Most, if not all, credit card companies practice this method of deception on the unsuspecting public. You did a great job of exposing this problem.

      Having said that, I will move on to the purpose of this correspondence.

      The credit card industry is a maze of misinformation, and down right fraud in some cases. Another insidious business is the third part collectors, who allege that you now owe a debt to them. This is a down right fraud in regard to commercial contracts. I was a victim of this fraud many years ago, before I did the research and discovered that I did not owe anything to these third party collectors. They capture unsuspecting debtors through “Adhesion Contracts”, when the debtor dose not respond with the right questions to these collecting agencies. Since I learned the truth about these crooks, I have stopped them after the first letter, even when it came from an attorney, or someone who pretends to be a lawyer.

      I hope that your research team, gives a comprehensive look at these types of contracts, and you are able to bring this information to your viewing public. It would help many who are trapped in this web of deceit.

      Thank you for your time, and keep up the good work you are doing.

      Warren William Stouch
      Berwyn, Pa. 19312

  • Steve

    Agreed. People who need their butts wiped all their life want the gov to swoop in and save them from being stupid. I have a card with citi through home depot. Guess what there is a date in decent print telling me when my promo is up on the statement. I’m not one who throws statements out unopened as a lot of people do. It’s time for people to take responsibility for themselves and grow up. If you don’t want to have to remember when to pay a bill then don’t buy things that way. Shame on you not the finance company.

  • Olney Falcon

    “Banks rarely go out of their way to notify you that your interest free deal is about to expire. ”

    Anybody with half a brain KNOWS how these deals work. I have no sympathy for anyone who doesn’t use their ‘half a brain”. Shame on them, and their parents for not teaching them, “There is no such thing as a Free Lunch!” Your moron parents rejected the aphorisms they were taught as children, and now their children are paying for it. Shame, shame, shame. But, hey, “That’s life! You win some, and you lose some!” God Bless…

  • Olney Falcon

    ” Where is the protection for the consumer and why are these contracts even allowed ? ” Tony, Tony, Tony… You keep on believing that the government is here to protect your sorry butt… LOL… Here’s some advice for you, pal, “READ THEN SIGN”… Not: “Sign then never read until it is too late to help YOURSELF!!!” Just another bunch of uneducated fools who need their diapers changed. Tired of hearing this nonsense. Grow the heck up, people!

    • Tony Badalamenti

      I think you miss my point. I understand buyer beware, read before you sign, etc. I know how these contracts work and would not be caught in one of them. I always pay 5- 7 days before any bill is due. My point is if you were to run an amortization schedule for a $5,600 loan at 25% for 12 months and paid $467 per month thinking it would be paid off, the balance would be $880 , not $1,300 as reported in this article. My point is the banks are not even calculating the interest properly yet they are allowed to do whatever they want. Do I expect the gov’t to protect me ? No of course not! I understand you need to look out for yourself because no one else will. I was only raising questions.

  • Steve

    Maybe consumers need to do their homework and stop crying because they didn’t read details before they sign. Would you sign a contract that gave up your civil rights because it was in fine print??? Wake up and read. Your signature is worth ten minutes if reading!!

  • Tony Badalamenti

    Even if he was late with the last payment, why is the bank allowed to charge interest on the full amount of $5,600. The interest should only be charged on the remaining balance of $466 if paid over 12 months. Isn’t there something illegal with the way these contracts are written. Where is the protection for the consumer and why are these contracts even allowed ?

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