How Credit Card Grace Periods Effect You

Before you apply for your next credit card be sure to check the length of the grace period. Grace periods are an often overlooked part of the credit card equation and they really shouldn’t be. A grace period is defined in Wikipedia as the amount of time one is given to pay back money that was loaned to them without incurring interest charges, fees or penalties.

If grace periods didn’t exist with credit cards, the card issuer could begin charging you interest from the very first day you use your card to make a purchase. Most credit card grace periods last one billing cycle, which usually runs between 25 – 30 days. When this time elapses the account is charged interest on the unpaid balance.

If you plan to pay your credit card balance in full every month you will want to know exactly what the grace period on your particular card is. This information is usually found in the fine print located in the terms and conditions agreement that is sent by the card issuer.

As the Federal law is written now, credit card issuers must mail your statement to you at least 14 days in advance of its due date. Not too long ago credit card companies were hauled before congress for not giving cardholders a sufficient grace period in which to pay their bills. It was to their advantage of course, that people exceeded the grace period and were charged interest on their unpaid balances. They quickly changed there ways as that little game came to the public’s attention.

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