About the Deferred Interest Calculator
This deferred interest calculator shows what happens with store cards and financing offers that say “no interest if paid in full within 12 months”. Interest is quietly tracked from the purchase date at the card’s regular APR — often 25%–30% — and if even $1 of the promotional balance is left when the promo ends, all of that back-interest is added to your account at once.
Enter the purchase amount, the length of the promotion, the APR and what you plan to pay each month. The tool shows the balance left at the deadline, the interest that has been building up behind the scenes, whether it will be charged, and the monthly payment that clears the balance in time.
This is different from a true 0% intro APR credit card, where interest only starts on the remaining balance after the promo. The calculation assumes interest accrues monthly on the balance you still owe (purchase minus payments made) and no new purchases are added to the promotional balance.
With the default inputs, the deferred interest charged at promo end is $317.13. Change any value above to recalculate instantly.
How to use the deferred interest calculator
- 1Enter the purchase amount financed on the promotion.
- 2Enter the length of the promo and the card’s regular APR from your agreement.
- 3Enter the payment you plan to make each month.
- 4Check whether a balance remains and how much interest would be charged.
- 5If needed, raise your payment to the amount shown to clear the promo in time.
Formula and method
Deferred interest is calculated each month on the promotional balance you still owe, at the card’s regular APR, starting from the purchase date. The balance falls by your payment each month. If the balance reaches zero before the promotion ends, the accrued interest is waived. If any of the promotional balance remains at the deadline, the whole accrued amount is added to your account in one charge.
The monthly payment needed to avoid interest is simply the purchase divided by the number of promo months. Issuers compute interest daily on the average daily balance, so real figures can differ by a few dollars from this monthly approximation.
- B(k)
- Promotional balance after month k (B(0) = purchase)
- APR
- Regular purchase APR that is deferred
- N
- Length of the promotion in months
Worked examples
$2,000 purchase, 12 months, paying $150
Twelve payments of $150 cover $1,800, leaving $200. Meanwhile interest at 26.99% has accrued on the shrinking balance — (2,000 + 1,850 + … + 350) × 26.99% ÷ 12 ≈ $317. Because a balance remains, the full $317.13 is charged, so you owe $517.13 after the promo.
Paying $170 a month instead
At $170 a month the balance is gone in the twelfth month. About $287 of interest was tracked along the way, but because nothing was left at the deadline none of it is charged — an extra $20 a month saves $317.
$3,500 furniture on an 18-month promo
Eighteen payments of $150 pay off $2,700, leaving $800. Interest at 29.99% on the declining balance adds up to about $1,001, all charged at once, so you would owe $1,800.92. Paying $194.44 a month would have avoided it.
Frequently asked questions
What is deferred interest?+
Deferred interest is interest that is tracked from the purchase date but only charged if you do not pay the full promotional balance by the deadline. If you pay in full in time, it is waived; if not, all of it is added at once.
How is deferred interest different from 0% APR?+
With a true 0% intro APR, no interest accrues during the promo and interest only starts on whatever balance is left afterwards. With deferred interest, the interest has been building all along and the full amount is charged retroactively if any balance remains.
How do I avoid deferred interest?+
Divide the purchase by the number of promo months and pay at least that much each month, aiming to finish a month early. Avoid adding new purchases to the same card, because extra payments generally go to the highest-APR balance first — the CARD Act only requires issuers to direct them to the deferred-interest balance in the last two billing cycles before the promo ends.
Does the minimum payment pay off a deferred interest promo?+
Usually not. Minimum payments on store cards are often set well below the amount needed to clear the promotional balance in time, which is why many shoppers end up paying the retroactive interest.
Where do I find the deferred interest APR?+
Check the credit card agreement or financing disclosure for the standard purchase APR — store cards commonly charge 25%–32%. Your monthly statement also shows the promotional balance, its expiration date and any accrued deferred interest.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.