One of the most significant benefits of owning a Credit Card is making an instant purchase, and paying for it a few days later, that too with no finance charges. It is this period between the date of the transaction and the due date to pay off the balance for the given month which is known as the Credit Card grace period.
To understand this, let us look at an example. Let’s consider that you make a purchase of Rs. 5,000 on 1st January and Rs. 14,000 on January 12thusing your Credit Card and your monthly bill is generated on January 30th. If for instance, the due date to clear your statement is Feb 15th, and you make the payment of Rs. 19,000 on before the due date, you will not be required to pay any interest, late fee penalty or other finance charges on these purchases. Besides, this will imply that your unbilled amount at the beginning of February will be zero.
In this case, the period from Jan 1st to Feb 15th is considered as the grace period for the first purchase, and that from Jan 12th to Feb 15th will be deemed at the grace period for the second purchase.
Like in this case, in most cases, the grace period ranges from 40 to 60 days in general.
When you Apply for a Credit Card, it is your onus to read the terms and conditions pertaining to the grace period carefully. If you are unable to understand some specific terms, feel free to inquire about the same with your bank official. Make sure that you have complete knowledge regarding the length of the grace period as well as the consequences of not paying off your balance within the said time.
When you fail to pay off the balance in full for a given billing cycle, you must know that the remaining balance will start accruing interest right from the first day of the next billing cycle.
In a vast majority of cases, the Credit Card issuer might revoke your grace period if you repeatedly default on the balance payments. This will mean, that your purchases will start accruing interest right from the date of the transaction, thus making them much more expensive than they actually are. Make sure you know about the terms of the agreement in this regard, before getting the Credit Card.
Then again, you must understand that some companies only offer the grace period for Credit Card charges and not for balance transfers and cash withdrawals. This would imply that you will be required to pay the costs off, without any delay, lest they will start accruing interest. Make sure you know the policy of your card issuer and manage your card usage accordingly.
If you keep paying your bills in full every single time, the chances are that your Credit Card provider might give you some respite with respect to the interest rates.
We hope that you now know all that there is to about Credit Card grace period. The underlying idea here is that in order to enjoy the astounding perks of a grace period, you should be regular with your bill payments, and should not carry any balance forward!
So, what are you waiting for? Get in touch with our card specialists or apply for credit cards online at MyMoneyMantra that best suit your spending habits. After all, you shouldn’t be devoid of this wonderful tool that offers you unprecedented financial freedom!
To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 70+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.