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How To Take Advantage of Your Credit Card Grace Period?

A credit card’s grace period is the time-off when consumers can arrange or manage their finances well. The grace period generally starts from the day-end of the monthly statement till the due date of the monthly bill. It allows consumers to earn interest on the amount payable to the credit card they may have in their bank account. It is beneficial for the one who manages the finances without getting into debt. 

Few things to be taken seriously when the discussion is about the grace period –

What is the billing cycle?

The billing cycle starts on the same day each month. It has a gap of 28 to 31 days to shift from one billing cycle to the next. This billing cycle primarily holds the history of all financial transactions. 

Grace period 

The credit grace period is the halting time when the banks work on the statements. This depends on the credit card, which will offer a grace period. Most of the time, credit cards do not offer this period. Hence, one should go through the terms and conditions at the time of credit card application.

Interest on the credit card 

The interest amount one pays for the credit card comes with a typical calculation. In the timeframe of a billing cycle, one’s transaction gets calculated based on the specific period. Let’s say the billing cycle is of 30 days, and one has done the purchasing. It would get reflected in the next billing cycle, where the minimum balance would be due at 20 to 22 days. The interest gets only added if the minimum balance remains unpaid. 

No need to keep any balance 

The problems would be for those who keep even the small amount and do not tend to pay the whole amount in one billing cycle. Even for the small amounts, the credit card interest rate is applicable. The grace period allows the interest-free time-off. If the consumers get in the loop of the interest once, they need to find a way to be out of the interest zone at the earliest. 

Do not take the grace period lightly

The grace period is primarily for managing the credit interest rate. Consumer needs to plan when they are accumulating credit card interest and not paying the total amount on each billing cycle. In such cases, there is a high chance that consumers can fall into debt if they miss a credit card payment. For an enormous amount of spending, a consumer can use a credit card; hence, they need to know when to pay off the whole amount. Mostly, credit cards have a 28-day grace period; the consumers should be ready to pay the amount. 

Avoid Credit Cards with Huge Reward Scheme

Often the consumers are lured by the exciting offers on credit cards, and this should be strictly avoided. There are cards which provide small rewards on purchases. This will be the feasible option. But few cards provide exciting offers that ask for overspending, which should be avoided. The spending must be within the limits of the consumer’s ability to pay back the money.  

Stop using the cash advance feature 

One should avoid the credit card cash advance because the interest rate gets charged at the withdrawal time. Cash advance brings higher interest rate, and there are high chances that one might lose the grace period entirely. 

Autopay should be considered 

Automation is vital for credit card payments. On enrolling for autopayment, one does not need to take the extra burden of keeping track of payment reminders. Late payment creates a toll on the grace period. Therefore, enrolment in auto pay would be the best option for credit card users. 

Grace period can be extended

The grace period is extendable, but the consumers need to know its process. The grace period varies from a maximum of 25 days, but it could be stretched to 56 days. For that, consumers need to know when to purchase. It will be better if one buys anything at the beginning of the billing cycle. 

Bottomline facts 

The grace period is the standard time-off to manage credit card payment. It could range from 28 days to 31 days. If one is enlightened enough about the billing cycle and the payment structure, one will be able to manage credit card transactions. For any small or large purchase, one needs to know how to manage their grace period, and they need to make the payment at the right time. Failing to make the payment on time could impact the consumer and make them fall into huge debt. 

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