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Fewer Credit Cards Offer a "Full" Grace Period
A credit card's grace period refers to the number of days before the card company starts charging you interest on new purchases. Many consumers think that with practically every card all their purchases are interest-free for at least 25 days regardless of the previous balance. "But, the fact of the matter is it's getting harder to find a credit card that offers that kind of free ride on finance charges," says Janet Kincaid, a credit card specialist with the FDIC in Kansas City.
Some cards still offer a "full" grace period. That would mean 25 days or more of interest-free purchases, even if you're paying interest on an outstanding balance from the previous month. However, with the typical credit card nowadays, if you carry over as little as a penny from the previous month's balance you can expect to be charged interest immediately on new purchases. And, if you have a card with no grace period, you always pay interest on new purchases from the day you make the purchase, even if you pay your bill in full.
The bottom line: Try to understand a card's rules governing the grace period as well as the interest rate and fees. You can do this by reading the literature provided by the card issuer and, if you have questions, calling what's usually a toll-free number for customer assistance. Also, think about how you plan to use a card, especially if you expect to carry a balance most months. Then try to choose and use the card that's best for you.
Disclaimer: All Information on this web site is provided "as is" with no claim of accuracy or of fitness. Always research any financial decisions prior to signing any documents and consult a professional when necessary.
For additional Information:
Federal Citizen Information Center