There are many terms associated with credit cards that you need to understand. And that’s especially true among those that could cost you money at some point. Understanding the ins and outs of a grace period could work in your favor if you lose track of your balance and/or when your next payment is due.
Note: if you want to learn more about a grace period as it applies to your account, it’s best to contact your credit card company directly. They can give you a full rundown to ensure that you have a sound understanding.
For now, let’s look at some of the basics associated with a credit card grace period.
What is a grace period?
In short, a grace period is the time between the end of a billing cycle and the date your next payment is due. You will not be charged interest as long as you pay your balance in full by the due date.
Note: credit card companies are not required by law to provide a grace period, however, most of them do so as a courtesy to customers.
Do you know your credit card company’s stance?
Don’t assume that you know how the grace period works for your credit card company. This varies from one issuer to the next, so it’s always a good idea to check.
Every credit card company has a system in place to ensure that customers receive their bill a minimum of 21 days before the payment is due.
Does a grace period apply to all transactions?
Generally speaking, grace periods only apply to purchase transactions. It doesn’t come into play if you use your credit card to get a cash advance. In this case, you’re required to begin paying interest on the date the transaction occurs.
Should you pay your credit card bill in full?
With a grace period, you have enough time to decide if you can pay your credit card bill in full. Whether or not you do so depends on factors such as the balance, your financial circumstances, and other expenses in your life.
When possible, pay your balance in full before the due date so that you avoid interest charges.
There’s nothing complex about a credit card grace period. As long as you know how it works, you should be able to use it to your advantage. And as noted above, if you have any questions don’t hesitate to contact your issuer. They can provide all the answers you need.