We can all use some breathing room now and then, and that’s what a credit card grace period is—it’s the time after you make a credit card purchase before interest charges kick in. But a grace period isn’t always guaranteed, and if you have one, it comes with responsibility too.
Q: What is a grace period?
A: A grace period is the time between when a purchase was made and the next statement’s due date, usually between 25 and 55 days. It’s not an extension of your due date.
Q: How does it work?
A: Say you make a purchase with your card. At the close of your billing cycle, you get a statement, which shows a payment due date in a couple of weeks. If you have a grace period, your credit card company won’t charge you any interest on that purchase, saving you interest on the days between when the purchase took place and payment was made (as long as you paid before the due date).
Q: When am I eligible for a grace period?
A: Every credit card is different. But usually, you only qualify for a grace period if you’ve been paying your full balance on time every billing cycle.
Q: Can I lose it?
A: Sure. If your credit card offers a grace period and you don’t continue to pay your full balance every month—or you pay your bill late—you will often lose your grace period. The good news is, you can get it back by paying your balance in full for 2 consecutive months. Check your credit card terms to see how it applies.
Q: Are there times when a grace period doesn’t apply?
A: Yes. Even if you have a grace period, some charges are not covered by it—like when you take a cash advance on your credit card or transfer a balance to a card that’s not at 0% APR (annual percentage rate). Interest on those transactions starts being charged as soon as you make them.
Check your card terms to find out if you have a grace period and what transactions it covers. It’s especially important if you’re considering credit card consolidation, which often involves a balance transfer.
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