Credit Card Grace Periods – What They Mean To You
Credit card grace periods are the amount of time given by a creditor to the consumer to pay off a purchase before interest charges are applied.
Although the amount of time offered will vary from account to account, grace periods most often fall between 20 and 25 days. This is not always the case, and there are many occasions when there is no grace period.
Several common types of grace periods are:
Partial Grace Period
This type of grace period utilizes the average daily balance method of computing interest charges, and does include new purchases provisionally. If the previous billing cycle balance was not paid in full, then interest is applied to new purchases immediately and there is no grace period. If the consumer paid their balance in full during their previous billing cycle, then interest will not be applied to new purchases till the next billing cycle.
Full Grace Period
This grace period also utilizes the average daily balance method of computing interest, but it excludes new purchases. This is very important and it means that any new purchases made will not have...
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