Protect Consumers From Interest Rate Pile-Ups

Target: Cathy McMorris Rodgers, Chair of U.S. House Committee on Energy and Commerce

Goal: Enact restrictions on deferred interest payment plans that ramp up consumer debt.

During the holiday season, many consumers turn to alternative methods to finance their gift buying. One common offering from many major retailers can create a quagmire of debt, however. Little-understood terms of deferred interest plans can add hundreds—or even thousands—of dollars to a consumer’s purchase expenses.

Deferred interest is an arrangement where consumers have an opportunity to pay off a loan within a set amount of time (usually from six to 24 months). If the loan is fully paid off by term’s end, the consumer will not have to pay interest. If even one payment is missed or one cent remains on the debt when time is up, however, the consumer is saddled with all of the interest that has accumulated on the debt at once.

Many consumers enter into these arrangements without understanding the caveat, with some even believing they are taking advantage of a no-interest plan. It is these consumers who are being taken advantage of, though, due to intentionally vague language that ensnares them. One recent survey found that about two-thirds of Americans think deferred interest plans should be banned. But every recent effort to put such a restriction into place has failed.

Sign the petition below to ensure the next attempt to end this deceptive practice succeeds.


Dear Representative McMorris Rodgers,

Major retailers and credit card companies are adding to their profit margins at the expense of the most vulnerable consumers. Most individuals would consider an interest rate of over 30 percent to be grossly excessive and manipulative, yet one common and legal practice has such rates as a prime feature. Deferred interest plans are costing Americans (many in desperate financial circumstances) millions of dollars every year.

While these delayed interest plans may seem enticing at first, obscure language and less-than-forthcoming pitches entrap and often deceive consumers. Some lawmakers have taken notice. California recently enacted legislation prohibiting healthcare providers from promoting deferred interest credit cards to patients. But at the federal level, such protection from predatory practices remains elusive. Even the CARD Act (which has consumer credit protection as its foundation) remains silent on deferred interest.

Please rectify this oversight.


[Your Name Here]

Photo Credit: Liza Summer

One Comment

  1. This is in need of help. Americans are having a difficult time of late due to, in my opinion, corporate fraud. Corporations are ripping off their customers. Corporations jack up prices blaming it on anything convenient and pass the increase on to the customer. I hope customers will follow the many of us who buy from smaller companies now whose products are cheaper, do a better job, and don’t come inmate plastic bottles! I have no intention buying from the corporations I used to adore as they are not worth my hard earned cash. I hope this will end and end with corporations taking a bad hit which will be permanent. Faithful customers don’t want to do business with corporations who lie, jack up prices, and show disregard for all customers. Obviously you don’t need customers and now you’ll have many less!

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