SAN FRANCISCO (CBS 5) — Zero-percent financing deals sound tempting when you are making a big purchase. But they can have costly consequences.

Justin Miller financed a new Tempur-Pedic bed through Citibank. Miller said the deal was a credit plan offering 12 months interest free. Even though he had the cash, he decided to finance $5,600.

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

But after Miller made the last payment, he received a bill from Citibank for $1,332.70. A year’s worth of interest Citibank calculated at 25 percent.

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

But according to the statement, the plan expired December 2nd. Miller’s payment was due four days later, after the interest free deal expired on December 6th.

“The statement due date was different from what they call the plan due date,” Miller said. In fact Miller believes the due date was intentional to fool customers into making their last payment after the interest rate expires.

Jose Quinonez with Mission Asset Fund said it’s a common practice. Quinonez adds banks rarely go out of their way to tell customers about expiration dates on interest-free deals.

“My recommendation to people is to make sure to pay off the whole balance completely in full by the 11th month, not wait till the 12th month to pay it off,” he said.

Citibank refused to discuss the specifics of Miller’s case, but it told CBS 5 ConsumerWatch the terms of the deal are clearly explained in the seven page contract.

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

Miller was able to convince Citibank to reduce the interest rate to $650. But after ConsumerWatch got involved, Citibank decided to refund Miller all of his money.

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