How to Use Credit Card Grace Period Effectively?

Credit Card issuers and banks don’t just keep attracting more & more customers, but they also make sure that their customers get maximum flexibility and convenience while availing of the credit facility. There are lots of fees & charges associated with credit cards, but you can avoid most of them by using your card wisely & making on-time payments. Interest rate is one of the most important fees charged by card issuers and this is also an essential factor to look at before applying for a credit card. If you are an experienced credit card user, you would be aware of the term ‘grace period’ of a credit card. It is the period during which no interest is charged on your transactions. But, many cardholders fail to use their card’s grace period effectively. This article will help you understand what a credit card grace period is and how you can get the maximum benefit out of it:

What is a Credit Card Grace Period?

Grace Period is the period between a credit card statement generation date and the payment due date or we can say that it is the time provided by your card issuer to pay your bills after generating the monthly statements. It can vary from issuer to issuer and is generally 18 to 20 days. As per RBI, it is mandatory for card issuers to provide at least 15 days for card users to pay their bills before accruing interest on the outstanding amount. Even after the end of a billing cycle, you get a few days to make your payment without any interest. It is only after the end of the grace period that the interest rate starts accruing on the outstanding balance on your credit card.

Difference Between Credit Card Interest-Free Period and Grace Period

Many people confuse between interest-free period & the grace period of a credit card and some users even understand both terms as the same. But, the grace period is not a synonym of the interest-free period, but a part of it. An interest-free period consists of the credit card billing cycle and grace period. Therefore, an interest-free period consists of 45 to 50 days, i.e. 30 days of the billing cycle and 15 to 20 days of the grace period. This is the total time period during which no interest is accrued on the transactions made during a particular billing cycle.

How to Make The Best Use of Credit Card Grace Period?

The first thing to keep in mind is to make your credit card bill payments in full every month. Most of the banks don’t provide a grace period to those who carry on a balance from the previous billing cycle or even if they provide a grace period, the interest is still charged on the balance that you are carrying month on month. So, just try to clear the full outstanding balance every month. Moreover, some important things to do during the grace period include checking your credit card statements thoroughly before paying the bills so that you don’t pay for any wrongly mentioned amount. Other than this, you can set automatic payment for your credit card or set payment reminders so that you don’t miss any payments.

Grace Period along with the billing cycle makes an interest-free period of up to 50 days, which is a really long time to pay for any purchase you make. In order to make the best use of this period, you should try to make large purchases in the initial days of your billing cycle. By ding this, you will get up to 50 days to pay for this transaction and probably, and you will get your salary twice during the interest-free period. This is how you can avoid interest totally by making the best use of the interest-free period of a credit card.

Bottom Line

A Grace Period id provided by the card issuers to make it convenient for the cardholders to pay their bills. The customers get sufficient time to make the payments, but it doesn’t mean that you should wait for the very last day to make your payment. If you have a sufficient balance available in your account, you can pay your credit card bill even before the payment due date and this is what is advised. You can use the grace period to go through the statement and getting any mistakes corrected before making the bill payment. Just make sure not to miss any payments in order to get the benefits of your credit card grace period. If you have any additional doubts regarding this, feel free to ask us in the comment section below!