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Credit Card Companies Banking On Incentives To Boost Holiday Spending

By Suzanne Monaghan

PHILADELPHIA (CBS) -- Credit card companies are trying to entice consumers to pay by plastic this upcoming holiday season by offering deferred interest plans.

They start the consumer off with an introductory annual percentage rate.

"Which is usually in the single digits," says Markita Morris-Louis of Clarifi. "It's very attractive."

But she says consumers need to read the fine print.

"Often after a year or 18 months," Morris-Louis says, "that interest rate can triple or quadruple into the double digits."

Racking up hundreds, or even thousands of dollars in interest.

"And that's really what the credit card is banking on," she says. "They're kind of hedging and making a gamble that you won't pay off within that time period and then all this interest will become due."

So it's really only a good deal if you are certain the balance can be paid before the deferred interest period expires.

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