Before going into how the credit card grace period works, you should, as a credit card holder, first, understand what the grace period is.

What is a credit card grace period

A credit card grace period is that time between a purchase being charged to your card and the date that your payment is due. Generally, it stretches between the end of the last billing cycle and the next due date and is typically 21 days.

The first thing that you should find out is whether your card offers a grace period because some cards don’t. To know this, check the terms and conditions of your credit card. Below the APR disclosures, you’ll see details that will suggest how to keep extra charges or interest to a minimum. It goes like this.

The due date will be 21 days after the close of each billing cycle. You’ll not be charged interest on new purchases if you pay your entire balance or Saving Balance by the due date every month”.

If it is not there, your credit card has no grace period, and interest will be charged from the date of each purchase even if you pay the full balance on the due date.

How does the credit card grace period work

All purchases made during a credit card billing cycle will go into the credit card transaction history and be added to your monthly statement. Once you pay in full each month, there will not be any charges for new purchases during the window of the grace period.

The grace period is valid until the time the balances are paid in full. If you pay only a part of the balance in a month, the grace period may be canceled, and interest will start accruing from the date of each new purchase. Generally, the lender resumes the grace period once full payment is made for a few billing cycles.

Under the CARD Act, issuers offering a grace period have to give at least a three weeks window from the last payment before charging interest on a new purchase. This is not mandatory. Discover offers cardholders 23 days and Bank of America, American Express, Wells Fargo, and Barclaycard, among others, provide 23 days grace period.

The key to getting the most out of your grace period is to know how the billing cycle works. It is usually taken as a one-month statement, but in reality, it is a tad more complex. In the first cycle, after the card is sanctioned, all purchases in the billing period will be reflected in the statement and included in the bill. After that, all purchases will go into the next month’s statement.

Any purchases made immediately after the opening of the next billing cycle will be added in the next month’s bill when you have to make a payment. Hence, taking into account your grace period, you get more than 21 days to avoid paying interest on your purchases.

Extending the credit card grace period

It is not possible to get an extension of the grace period by simply requesting the lender. But you can ask for a change in billing cycle date that could buy you another seven days before interest is levied on the balance.

There is another way too, and that is tweaking the day of your purchases. Buy right at the beginning of the billing cycle when your bill is due after 30 days at the end of the billing cycle. Pay the balance in full on the due date, and you would have enjoyed almost 30 days of interest-free credit.

A credit card grace period can come in handy when you buy expensive products, which might take several weeks to pay off. And if you have a card that charges interest daily, you will only have to pay interest for each day that the balance is due. Space out your purchases and make the most of your credit card grace period.