NDSU Extension - Sargent County


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Using a Credit Card Grace Period to Your Advantage

Using a Credit Card Grace Period to Your Advantage 4/28/17If your credit card has a grace period, it is to your advantage to know what it is and how to use it.

To determine whether or not your credit card has a grace period, read the back of your monthly credit statement carefully, including the fine print.                  

By definition, a grace period is the number of days the card holder has before a credit card company starts to charge interest on new credit purchases. Basically, it is the time between the closing date of the billing cycle and the payment due date. Of greatest importance is to realize that to take advantage of the grace period, the card holder needs to pay the balance in full in order to avoid finance charges. For cards that have grace periods, most grace periods are 20 to 25 days.

Another way to strategically use a grace period is wait until immediately after the closing date on the account before making make major purchases.  By doing so, the card holder maximizes the number of days before the charges show up on the credit card billing statement. 

A couple of consumer tips are in order.  First, write the closing date on the front of the card, using a fine tip permanent marker.  This will be an easy, convenient way for you to remind yourself of that important information.  Second, to better manage your cash flow, it is possible to contact the credit card company to ask them to change the due date on your account so that it coincides with the dates that you are paid. 

For more information on personal and family finance topics, contact the Extension Office or access information online at https://www.ag.ndsu.edu/money/.

Based on information from Cutting Credit Costs: Understanding Grace Periods,  http://extension.psu.edu/publications/ui327

Photo Source: https://pixabay.com/en/credit-card-card-wallet-money-1104960/ (downloaded 5/2/17)





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