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If you want to buy in one of the two most expensive metro areas of the U.S., you’ll need to earn more than $400,000, a recent report finds.
To put those figures into perspective, the median U.S. household income was $75,000 in 2022, according to the report. 
“The Bay Area has consistently been one of the most expensive markets in the country,” said Daryl Fairweather, chief economist at Redfin.

Thomas Barwick / Getty

As home prices and interest rates rise, would-be homebuyers need a salary of $114,627 to afford a median-priced house in the U.S., according to a recent report by real estate site Redfin.
If you want to buy in one of the most expensive metro areas of the U.S., you’ll need to earn even more. In the top 10 cities, you’ll need to earn more than $200,000, or close to it, researchers estimate. Buying in the priciest two metros would require salaries of more than $400,000. Redfin analyzed median monthly mortgage payments in August 2023 and August 2022.

To put those figures into perspective, the median U.S. household income was $75,000 in 2022, according to the report. 
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Metros where homebuyers need to earn the most

San Francisco and San Jose, California, are the top two metros that require the highest salaries, of $404,332 and $402,287, respectively, according to Redfin.
“The Bay Area has consistently been one of the most expensive markets in the country,” said Daryl Fairweather, chief economist at Redfin.

Three more California metros — Anaheim, Oakland and San Diego — round out the top five, requiring interested buyers to earn between $240,000 and $300,000 annually.

The median income in these cities is high, but so are real estate prices. Higher interest rates have increased the cost to borrow, so buyers will need to show significant income to get a mortgage.

Why the New York metro area is low on the list

Midtown Manhattan, New York, as seen from Hoboken, New Jersey.
Gary Hershorn | Corbis News | Getty Images

While the borough of Manhattan in New York may have the highest cost of living among U.S. cities, according to the Council for Community and Economic Research’s Cost of Living Index, the New York metro area as a whole ranks ninth on Redfin’s list.
That’s because the metro area goes beyond Manhattan and the city’s four other boroughs, extending into nearby counties. 
“Even though Manhattan is really expensive, once you get to the outlying areas [in] the New York metro area, it actually becomes quite affordable,” said Fairweather.

Interested homebuyers in the region still need to earn six figures annually to afford a home, about $197,734, Redfin estimates. 

All-cash purchases price out first-time homebuyers

Earning a high salary isn’t enough in some competitive markets. Buyers may find themselves competing against veteran homeowners who can make cash offers.
Some homebuyers are using their home equity to buy new homes in lower-priced areas instead of financing, to avoid an 8% mortgage rate, said Fairweather.
“That might be driving prices up and affordability down,” she said.
The share of first-time homebuyers dipped to 27% in September, down from 29% in August, according to the Realtors Confidence Index survey. During the same period, all-cash buyers bumped to 29% from 27%.

Historically, first-time homebuyers would make up around 40% of the housing market, said Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors.
“Seeing it at 27% speaks to the affordability and inventory challenges first-time homebuyers are facing,” said Lautz.
All-cash homebuyers are largely older consumers who have housing equity and are able to make housing trades without financing new mortgages, added Lautz.
Additionally, while some all-cash buyers are local to the areas in which they’re buying, long-distance movers are more likely to pay in full.Don’t miss these CNBC PRO stories: More

Americans paid $130 billion in interest and fees in 2022, according to a new report by the Consumer Financial Protection Bureau.
Late fees continued to be the most significant penalty charged to cardholders.
“As big as these 2022 numbers are, I don’t think anybody should be surprised if the 2023 numbers ended up being bigger,” said Matt Schulz, chief credit analyst at LendingTree.

American cardholders paid $130 billion in interest and fees in 2022, according to a new report from the Consumer Financial Protection Bureau.
Cardholders were charged more than $105 billion in interest last year, and $25 billion in fees. The tally represents “the highest amount of interest and fees ever measured by the CFPB’s data,” according to the report.

A separate analysis from WalletHub estimated credit card holders paid roughly $163.89 billion in fees and interest last year. The site assessed data from the Federal Financial Institutions Examination Council.
Between 2018 and 2020, such charges were roughly $120 billion per year, according to a 2022 report from the CFPB.
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“As big as these 2022 numbers are, I don’t think anybody should be surprised if the 2023 numbers ended up being bigger,” said Matt Schulz, chief credit analyst at LendingTree.
The Federal Reserve has implemented four rate hikes so far in 2023, and although the central bank is not expected to raise rates again when it meets next week, another rate hike may not be completely off the table this year.

Late fees continue to outpace other charges

Late payment charges are the “most significant” credit card fee, in terms of frequency and cost, the CFPB found. Consumers paid roughly $14.5 billion in such fees last year, the agency said, which represents a return to pre-pandemic levels.
The Biden administration has focused on cracking down on what it terms “junk fees” with the Federal Trade Commission and the CFPB in all areas of consumers’ lives, including certain credit card penalties.
Some credit card companies charge as much as $41 for a missed payment. The goal is to reduce late-payment fees to $8, ban late-fee amounts that go over 25% of the cardholder’s required payment and end the automatic annual inflation adjustment, the CFPB said in a February statement.

These charges are significant for lower-income households that may pay these fees constantly, amounting to almost a few hundred dollars over the course of a year, said Schulz.
Proposed changes are meant to fill gaps in the Credit Card Accountability Responsibility and Disclosure Act of 2009, or CARD Act. The law imposed guardrails on credit card companies such as price controls on penalty fees and specific conditions in which they can be charged. However, there is no restriction on how much APR a company can charge nor language on late fees.

How to minimize credit card fees, interest

Cardholders who carried a balance paid about 20% of their average statement balance in interest and fees last year, the CFPB found. WalletHub estimates that cardholders paid on average $76.27 in fees and interest per credit card account in the fourth quarter of 2022.
It’s worth looking at ways to lower these additional charges.
“Life is so expensive in 2023 and it’s not going to get any cheaper any time soon,” Schulz said.

1. Ask your card issuer for a break

Littlebloke | Istock | Getty Images

Cardholders “can ask their card issuers for help,” Schulz said. Those who do “are more successful than most people realize,” he said.
For instance, more than 3 in every 4 cardholders who asked for a lower interest rate on one of their credit cards in the past year got one, according to LendingTree. Almost 90% of people who called their issuer about a late fee were able to get it waived, a 2022 WalletHub survey found.
If you ask your card issuer to lower your interest rate, they may run a credit check to see if anything has changed with your financial situation since you opened the card. However, the savings you may get with the lower rate may be worth taking the “little hit on your credit score,” said Schulz.

2. Use autopay, but remember it ‘isn’t perfect’

Consider setting up automated payments for your credit card statements so that you don’t miss a payment or accidentally pay late.
However, don’t lose sight of your monthly statements because “autopay isn’t perfect,” said Schulz.

Autopay makes a lot of things easier, but it doesn’t absolve people of the responsibility for still keeping an eye on things.

Matt Schulz
chief credit analyst at LendingTree

You could still end up paying late if you don’t monitor the due date, and you may not be paying enough to cover the minimum if your balance is higher than expected. To avoid paying more in interest and fees, try to make sure you cover the entire statement balance.
“Autopay makes a lot of things easier, but it doesn’t absolve people of the responsibility for still keeping an eye on things,” added Schulz.
You can also ask to change your due date to make it more convenient, said Sara Rathner, credit cards expert and writer at NerdWallet. You’re aware of how much money you have available in your checking account this way before an automated payment goes through.

3. Avoid surprises

Take advantage of opportunities to mitigate surprise charges and get the information you need about your card, said Winnie Sun, co-founder and managing director of Sun Group Wealth Partners in Irvine, California.
Make sure you’re aware of your charges, whether that means routinely checking your statements or setting up push notifications every time your credit card is charged, said Sun, a CNBC Financial Advisor Council member. That can help you spot fraud and be aware of fees and interest you’ve accrued.
Finally, if you haven’t reviewed the terms and conditions with your credit card company in a long time, contact your issuer’s customer support and ask for a list of fees and how much each costs.
“You can always contact your card issuer and ask basic information about the card you have,” said Schulz.Don’t miss these CNBC PRO stories: More

A new travel requirement to visit most European nations was delayed to sometime in 2025. It was scheduled to take effect in 2024 and has been postponed many times.
The requirement is an online travel authorization via the European Travel Information and Authorisation System, or ETIAS.
It’s meant to strengthen security checks on people from more than 60 nations, including the U.S., who can visit Europe’s Schengen Area without a visa.

Thirty European nations have delayed implementing the ETIAS travel authorization scheme for U.S. and other foreign visitors until 2025. Pictured, Krakow, Poland.
Martin-dm | E+ | Getty Images

A new requirement for American travelers bound for Europe slated to take effect next year was delayed — again — to 2025.
The requirement — an online travel authorization via the European Travel Information and Authorisation System, or ETIAS — applies to visitors to 30 European nations, including popular destinations such as France, Germany, Greece, Italy, Portugal and Spain.

Americans won’t be allowed to visit without the authorization.
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Until late last week, the European Union had telegraphed that the ETIAS program would begin in 2024. That has now been pushed to sometime the following year.
The system “will be ready to enter into operation in Spring 2025,” according to an announcement following an Oct. 19-20 meeting of the Council of the European Union.
The European Union website for ETIAS has similarly updated language, citing “mid-2025” as the new official start date. Since the program isn’t yet operational, no applications are currently being collected, the EU website said.

A spokesperson for the European Commission didn’t respond to a request for comment on the delay by press time.
The European Commission, the executive body of the EU, in 2016 proposed to establish the ETIAS to strengthen security checks on people from more than 60 nations (including the U.S.) who can visit Europe’s Schengen Area without a visa. The new European system is similar to one the U.S. put in place in 2008.
The travel authorization requirement — which carries a nonrefundable fee of 7 euros a person, or about $7.40 at current exchange rates — has already been delayed many times. It was initially meant to take effect in 2021, then 2023 and 2024 — and now 2025.

Processing could take up to a month for some

Photoman | Istock | Getty Images

People under age 18 or over 70 are exempt from the application fee.
Most applications will be processed in minutes and within four days at the latest, according to the EU. However, it can take longer — up to an additional 30 days for travelers asked to provide extra information or documentation or do an interview with national authorities, the EU said.
“We strongly advise you to obtain the ETIAS travel authorization before you buy your tickets and book your hotels,” the EU website said.
The ETIAS authorization is valid for three years or until your passport expires, whichever comes first. Travelers with a valid ETIAS don’t need to apply for a new one each time they visit Europe. More

With inflation and higher interest rates taking a financial toll, fewer Americans put money in an emergency fund this year, according to a new report.
Most financial pros recommend having at least six months’ worth of expenses set aside, or more if you are the sole breadwinner in your family or in business for yourself.

It’s becoming increasingly difficult for Americans to set money aside.
Largely due to high inflation and rising interest rates, 81% of adults said they did not contribute to their emergency savings this year, and 60% also said they feel behind when it comes to building a cash cushion, according to a new Bankrate report.

“Rising prices and high household expenses have been the predominant impediments to boosting emergency savings,” said Greg McBride, Bankrate’s chief financial analyst.
“When expenses increase faster than income, that puts households in a bind.”
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Up until now, most Americans have benefited from a few government-supplied safety nets, most notably the large injection of stimulus money, which left many households sitting on a stockpile of cash after 2020, according to Sung Won Sohn, professor of finance and economics at Loyola Marymount University and chief economist at SS Economics.
But that cash reserve is now largely gone after consumers gradually spent down their excess savings from the Covid years.

“Going forward, I am beginning to worry because savings are running out,” he said.
Soaring inflation in the wake of the pandemic made it harder to make ends meet. At the same time, the Federal Reserve’s most aggressive interest rate-hiking cycle in four decades made it costlier to borrow.

How to start building an emergency fund

A customer shops at a Costco store in San Francisco on Oct. 2, 2023.
Justin Sullivan | Getty Images

Most financial experts recommend having at least three to six months’ worth of expenses set aside, or more if you are the sole breadwinner in your family or in business for yourself.
To improve your cash cushion, “you’ve got to do what works for you,” McBride said.
“Cutting household expenses in a meaningful way may not be feasible with the run-up in prices for mainstay items such as shelter, food and energy over the past couple of years.”
Instead, “consider tapping into the tight labor market with a side hustle, freelance or contract work, or even taking on a second job for a period of time in order to make headway on boosting savings,” McBride said.
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Year-end Planning

There have been complex changes to required minimum distributions over the past few years.
While Secure 2.0 changed the beginning RMD age to 73, there’s confusion about when retirees need to start withdrawals.
You also need to consider the rules for inherited accounts, experts say.

Sdi Productions | E+ | Getty Images

As a retiree, mandatory retirement plan withdrawals can be a source of stress and confusion — and complex changes over the past few years have led to mistakes, financial experts say.
Generally, you must start these yearly withdrawals, known as required minimum distributions, or RMDs, by a specific age. Before 2020, RMDs began at age 70½, and the Secure Act of 2019 increased the beginning age to 72. But in 2022, Secure 2.0 raised the age to 73, which started in 2023.

The RMD rules for inherited individual retirement accounts are even more complicated, prompting the IRS to waive penalties for missed RMDs over the past couple of years.
“They’re crazy,” said IRA expert and certified public accountant Ed Slott, describing the new RMD rules. “You shouldn’t need an engineering degree to figure it out.”

More from Year-End Planning

Here’s a look at more coverage on what to do finance-wise as the end of the year approaches:

For 2023, RMDs apply to both pretax and Roth 401(k) accounts, along with other workplace plans. The mandatory withdrawals also apply to most IRAs, but there are no RMDs for Roth IRAs until after the account owner’s death. 
If you skip your yearly RMD or don’t withdraw enough, there’s a 25% penalty on the amount you should have withdrawn. You can reduce the penalty to 10% if the RMD is “timely corrected” within two years, according to the IRS.
You can request a penalty waiver from the IRS by filling out Form 5329 and attaching a letter of explanation. But there’s no guarantee the IRS will agree to waive the fee, Slott said.

Which account owners need to take an RMD

“The most important change that retirees should know about RMDs is the increased age,” said certified financial planner Ben Smith, founder of Cove Financial Planning in Milwaukee.  
Secure 2.0 bumped the RMD beginning age to 73 from 72 for pretax IRA owners and retirement plan participants. You must take your first RMD by April 1 of the year following the year you turn 73, he said.
If you turn age 72 in 2023, you can delay RMDs until age 73. But if you turned 72 in 2022, you needed to take your 2022 RMD by April 1, 2023, and your 2023 RMD by year-end.

To put it another way: If you were born in 1950 or earlier, you need to take an RMD in 2023, and those born in 1951 or later don’t have an RMD in 2023, Slott explained.
“People still working with a company plan can delay until they retire,” he said. But the extension doesn’t apply to IRAs.
Inherited IRA owners also need to know the withdrawal rules, which hinge on when the original owner died and the type of beneficiary.Don’t miss these CNBC PRO stories: More

Supplemental Security Income beneficiaries were supposed to get stimulus checks with no strings attached.
Three U.S. senators say the extra income has compromised benefits for some and are asking the Social Security Administration for an explanation.

Douglas Sacha | Moment | Getty Images

When Covid-19 stimulus checks were deployed to millions of Americans, the government reassured Social Security and Supplemental Security Income beneficiaries they were eligible for payments.
But some beneficiaries, who include retired and disabled Americans, may have gotten more than they bargained for — lost benefits.

Some SSI recipients have seen their benefits suspended or have been assessed overpayments as a result of stimulus checks, which were worth up to $3,200 per individual or $6,400 per married couple over three rounds of payments. Social Security beneficiaries have also reportedly received overpayment notices.
Those reports prompted three Democratic leaders — Sens. Ron Wyden, D-Ore.; Sherrod Brown, D-Ohio; and Bob Casey, D-Pa. — to send a letter to the Social Security Administration last week stating they are “deeply concerned.”

Stimulus funds clashed with strict SSI asset limits

Supplemental Security Income, or SSI, provides benefits to adults and children who are disabled and blind, as well as elderly individuals age 65 or older with little income or resources.
The size of the monthly payment beneficiaries receive depends on their income, living circumstances, assets and other factors. Each month, beneficiaries must report their income and wages, as well as any changes to their resources or living arrangements.
That oversight is aimed at making sure beneficiaries still qualify under SSI’s strict rules. Notably, that includes a limit of $2,000 in assets of any kind per individual beneficiary, or $3,000 for married couples or two-parent families with children who are SSI beneficiaries.

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SSI beneficiaries tend to have few resources and limited income, and therefore likely qualified for full stimulus payments. But the low asset limits means those payments may have caused complications.
The Social Security Administration announced in 2021 that the stimulus checks would not count toward eligibility and payments of SSI benefits, regardless of how long beneficiaries held onto the money.

Benefit suspensions have ‘profound negative impact’

“SSI benefits, while modest, have a substantial impact in the lives of the people who rely on them,” the senators wrote to Kilolo Kijakazi, acting commissioner of the Social Security Administration. “Benefit suspensions and overpayment notices — regardless of the cause — can have a profound negative impact in their lives.”
“Further, losing SSI eligibility risks a lengthy bureaucratic process to restore eligibility and also risks beneficiaries’ access to Medicaid coverage,” the senators wrote.
The lawmakers are asking the Social Security Administration to provide more information on the number of beneficiaries who saw their benefits reduced or suspended between March 2020 and July 2021; August 2021 and December 2022; and January 2023 to September 2023.

Additionally, the leaders are seeking to find out how many of those individuals saw their benefits reinstated without an appeals hearing; how many were reinstated due to an appeals hearing; the number of appeals that have been denied; and the number of appeals that are still pending.
The senators are also seeking to find out the number of claimants who have been denied SSI benefits because of the stimulus checks, among other details.
Notably, Brown and other lawmakers are working on a bipartisan bill to update SSI’s asset limits.
The errors come as no surprise to Darcy Milburn, director of Social Security and health-care policy at The Arc, an advocacy organization for people with intellectual and developmental disabilities. The group was hearing about this issue “fairly frequently” during the depths of the pandemic.

“It’s honestly trailed off a bit now,” Milburn said. “But some people are still having issues.”
One reason for that is it can be a challenge for the Social Security Administration to communicate guidance all the way down to the local level, she said.
There are 7.6 million people on SSI, and each one of those people’s assets are checked very frequently by the Social Security Administration, according to Milburn.
“If at any point in time, one of those SSI beneficiaries had assets over the $2,000 limit, it would have been flagged internally,” Milburn said.

When SSI beneficiaries should file an appeal

The general advice for situations with overpaid Social Security benefits is to communicate income and asset changes to the Social Security Administration as quickly as possible, according to Milburn.
Notably, the disability community worked very hard to communicate that the stimulus payments should not count against income or assets for SSI beneficiaries, she said.
“If you receive an overpayment notice from the Social Security Administration, and believe that it was due to a Covid stimulus payment or another error that was made by the Social Security Administration, you should file an appeal,” Milburn said.

Stimulus checks ‘are not counted as income’

Social Security Administration spokeswoman Nicole Tiggemann confirmed to CNBC on Monday that the agency had received the senators’ letter and plans to respond directly to them.
The agency has also instructed its employees to ask about the receipt of stimulus checks, formally referred to as economic impact payments, including how much was received, how much had been saved and where, Tiggemann said. Social Security Administration employees were instructed to deduct the saved amounts from a beneficiary’s financial account balance until they reported having spent the funds completely.
Additionally, the Social Security Administration provided information on the stimulus checks on web pages, blogs, social media, emails to SSI beneficiaries with my Social Security accounts, letters to advocates, and mailed notices to people who received or were eligible for SSI in 2020 and 2021, Tiggemann said.
“We included information that [economic impact payments] are not counted as income when received and will not be counted against SSI applicants or recipients’ resource limits no matter how long they keep those funds,” Tiggemann said. More

After becoming popular on TikTok, more people are trying the so-called envelope method, or “cash stuffing,” to stay on budget and out of debt.
But there are downsides to stashing cash at home rather than in a high-yield savings account, including leaving yourself vulnerable to theft and forfeiting as much as 5% in interest.

Daniel Grill | Getty Images

These days, savers can get better returns on their cash than they have in nearly two decades.
After a series of interest rate hikes from the Federal Reserve, top-yielding online savings account rates are now more than 5%, according to Bankrate.com.

“Moving your money to a high-yield savings account is the easiest money you are ever going to make,” said Greg McBride, Bankrate.com’s chief financial analyst.
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And yet, some people are forgoing competitive returns altogether in favor of keeping cash, literally, at home.

How cash stuffing works

After gaining popularity on TikTok, more young adults are trying the so-called envelope method, or “cash stuffing,” to stay on budget and out of debt.
The premise is simple: Spending money is divided up into envelopes representing your monthly expenses, such as groceries and gas. When the cash in one envelope is spent, you’re either done spending in that category for that month, or you need to borrow from another envelope.

“There is this back-to-basics mentality,” said Ted Rossman, senior industry analyst at Bankrate.
Such tools can help impose discipline, he said, which is “a reasonable way to stay on budget.”
However, it’s not “the ideal scenario,” he added.

Some downsides of keeping cash

Stashing cash not only forgoes the protections that come with consumer banking, it may also leave you vulnerable to theft.
Whether you are covered in case of a burglary may depend on your home insurance policy, whereas banks are covered by the FDIC, which insures your money for up to $250,000 per depositor, per account ownership category.
And then there is the additional cost that McBride flagged: a missed opportunity to earn up to 5% on your savings.

“Generally, introducing the idea of budgeting is probably a positive thing but if folks are leaning on cash as opposed to taking advantage of the highest returns we’ve seen in a long time in high-yield savings accounts, then they are leaving money on the table,” said Matt Schulz, chief credit analyst at LendingTree.
For example, if you have $5,000 in a high-yield savings account earning 5%, you’ll make $250 in interest in a year.
“When you are living paycheck to paycheck, every little bit helps,” Schulz said.
Alternatives like Treasury bills, certificates of deposit or money market accounts have also emerged as competitive options for cash, although this may mean tying up your savings for a few months or more.

Vet financial advice from social media

Dvorkin recommends seeking out credible sources such as the National Foundation for Credit Counseling or the Consumer Financial Protection Bureau.
“Stay away from TikTok, stay away from Instagram,” he said.
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The average annual percentage rate for retail credit cards reached 28.93%, a record, up from 26.72% last year, according to Bankrate.
“We’ve seen all types of credit card rates go up in recent years, but store cards have been increasingly notable,” said Ted Rossman, senior industry analyst at Bankrate.
Here are three things to consider when looking into retail credit cards.

Hispanolistic | E+ | Getty Images

As the average interest rate on retail store credit cards nears 30%, many holiday shoppers could be in for even more financial strain this year if they carry a balance.
The average annual percentage rate for merchant cards reached 28.93%, a new record high, up from 26.72% last year, according to new data from Bankrate.

“We’ve seen all types of credit card rates go up in recent years, but store cards have been increasingly notable,” said Ted Rossman, senior industry analyst at Bankrate.
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In the past, 29.99% interest rates were listed on credit cards of all kinds as so-called penalty rates, or the rate an issuer would charge a consumer who was late with payments, said Matt Schulz, chief credit analyst at LendingTree.
“It’s becoming way more common for many credit cards to have that as a possible standard rate,” Schulz told CNBC in a previous interview.
While retail store credit cards can be easier to qualify for, especially for those with lower credit scores or little credit history, experts say consumers should be careful when deciding to open such a high-rate line of credit.

When to avoid retail credit cards

Retail credit cards can help shoppers save money on purchases and gain early access to sales, which can be valuable benefits as long as you pay the card in full. However, you may want to avoid them if you’re going to carry a balance, experts warn. 
“With such high interest rates, these purchases could cost you more than double what they originally were when you first bought the item, if you carry that debt for a long time,” said Sara Rathner, credit cards expert and writer at NerdWallet.  
Holiday debt does have a way of sticking around. About 52% of Americans incurred credit card debt while holiday shopping last year, and as of mid-August, nearly a third have yet to pay off their balances, according to NerdWallet’s 2023 Holiday Shopping Report.

Yet, about 74% of 2023 holiday shoppers still plan on using credit cards to buy gifts this year, NerdWallet found. 
For holiday shoppers who may consider opening a retail credit card for holiday purchases, it can be smart to do so if a sizable discount is offered or if the purchase is something you or the gift recipient will benefit from in the long term, said Bankrate’s Rossman. 
Otherwise, shoppers may want to question what effects the transaction will have on their financial future, added Rathner.

‘These 0% promos are very dangerous’

Retail credit cards will oftentimes offer a 0% interest promotion described as “deferred interest.” However, if the cardholder misses a payment by mistake or does not pay the balance in full, “these 0% promos could be dangerous,” said Rossman. 
Consumers might see deferred interest offers more commonly in stores where they are more likely to make major purchases, such as appliances or furniture, said Rathner.

With such high interest rates, these purchases could cost you more than double what they originally were.

Sara Rathner
credit cards expert and writer at NerdWallet.  

With a deferred interest deal, cardholders are given a set amount of time to make payments with 0% interest. If they have not paid off the purchase in full by the end of the period, not only will they earn interest on the remaining balance, but they will also retroactively incur interest on the original purchase price, she added.
“If you bought a couch for $2,000 and you still owed $500 by the time the promotion ended, you don’t just owe interest on the $500, you owe interest on the $2,000,” Rathner said.
It’s a “very sneaky” and common tactic on retail cards that’s often buried in the fine print, added Rossman.

Don’t make financial choices at the register

Take your time when deciding whether to open a new line of credit, but don’t make your mind up at the cash register.
“People make bad decisions because they don’t think it through or they don’t realize what’s going on,” said Rossman.

Ask for a brochure you can take home, and then research the credit card and its terms online. See what other offers are available and perhaps weigh competing products against one another to find the best option that suits your needs, Rathner added.
“Don’t make that decision in a crowded store during the holiday season, when everybody behind you is yelling at you to finish,” said Rathner.Don’t miss these CNBC PRO stories: More