What is a credit card grace period? Your grace period is the amount of time you have between the time you make a purchase on your credit card and the point at which the credit card company begins to charge you interest on your new purchase. Traditionally, this grace period has been 25 days, but some credit card companies have whittled the grace period down to 20 days.
Who Qualifies for a Credit Card Grace Period?
Generally, most credit card companies offer an interest-free grace period to customers who pay off their balance in full every month. But different credit card companies have different grace period policies. The credit card grace period may not work the same way with different credit cards. Some credit card companies will charge you interest on new purchases immediately, especially if you have not paid off your credit card balance in full by the end of the month. Some will not charge interest if payment is made in full by the end of the credit card grace period. However, if only a partial payment was made, interest will kick in at the end of the credit card grace period.
Do I Have a Grace Period
To find out what kind of grace period you have on your card, you will have to know what to look for on your credit card statement and pay close attention to any changes in your card offer to make sure your credit card grace period has not changed. Look for the words “average daily balance including new purchases” to determine what sort of balance calculation method your credit card company uses. If your credit card statement calculates “average daily balance including new purchases,” that means that you have no grace period on new purchases. If you have a grace period on your new purchases, your credit card statement will read “average daily balance excluding new purchases.” You can also look for any statement that says that you will pay a finance charge from the date of any credit card transaction.
If you can’t tell what kind of grace period your card has by looking at your statement, call your credit card company and ask them, or ask for a copy of your cardholder agreement. Your credit card issuer is required by law to describe the computation method used in your cardholder agreement.