Grace Period

You may not know the exact grace period on your credit cards or exactly what a grace period means.  There is a common misconception that a grace period is how long you have to pay your credit card balance.  If that were the case, then your due date would be 20 to 30 days later than printed on your monthly credit card statement.  Grace periods on credit cards are how much longer after your payment is due before your credit card company will charge you interest.  And, if you only paid the minimum balance from the month before, a grace period won’t apply.

If you have questions about grace periods, you should read the fine print on your credit card statement or call your credit card company and clarify exactly how long your grace period is and what kind of grace period you have.  Depending on your credit card company, you may not even have a grace period.

Grace periods do afford you some flexibility in case you make a payment later than its due date.  If you have a grace period on your account, be sure you know exactly what changes after it, so that your purchases don’t cost any more than they need to.  Interest rates can add up and eat away at your income, so being an informed consumer is the best way to save money.

Also, to avoid the hassle of having to worry about the interest rates associated with grace periods, set up a reliable payment schedule so that you can stay on top of your bills.  Some companies offer e-mail notifications of due dates and payment amounts and you can often have your bills electronically drafted from your account each month.