Credit cards don’t have to cost extra when used wisely. You can benefit from reward points, cashbacks, and travel perks. These features improve your purchasing power and bring convenience. But, have you ever enjoyed a zero-interest period when using credit cards? It refers to the grace period offered by the credit card issuer.
Proper usage of the card during the grace period will help you avoid interest and manage cash flow. However, many Australians do not know about this secret period between their payment due date and the purchase.
Understand the Grace Period of Your Credit Card
Most credit card issuers offer a grace period, which is a timeframe between the end of the billing cycle and the due date for the payment. At this time, you can repay the balance without late fees or interest. It means the bank lets you borrow money for a short-term period without extra cost. The interest-free period credit card from ING lets you avoid the additional charge for up to 45 days.
How Does the Grace Period Work?
Before applying for a credit card, understand how the grace period works.
Post-billing cycle – The end of your billing cycle initiates the grace period for your card. So, pay the bill at this time to grab the benefit.
Interest-free period – The payment of the full balance within the zero-interest period will allow you to save on purchases.
Not for every transaction – You will not get the zero-interest benefit for transactions like balance transfers and cash advances. But, those who are qualified for 0% APR promotion will avoid paying interest on these transactions.
Delay in payment – In case the bill is not fully paid at the end of the grace period, you need to pay an extra charge.
Benefits of Using a Credit Card with a Grace Period
An interest-free period credit card will provide a range of benefits.
Save on interest – You will have an interest-free loan by paying the bill within the grace period. Full payment within this period enables you to bypass the interest.
Effective cash flow management – The interest-free period is a type of financial flexibility that gives you time to align with your priorities and income.
Avoid late charges – You can avoid hefty late payment fees during the grace period. Thus, pay your bill on time and save money.
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Can You Expand the Grace Period?
- Make high-value purchases at the beginning of the billing cycle.
- Pay the full amount that is currently due (not just the minimum).
- Track the billing date using your calendar or account app.
- Check the app alerts or free SMS sent by the bank.
- Choose a credit card that coordinates with your billing cycle.
- Ensure that the chosen card has the longest grace period.
Understand Your Grace Period Today
The grace period of a credit card is a powerful feature that provides financial benefits. Especially those who make timely payments will get significant value from this feature. Most banks offer credit cards with interest-free periods. But, you should also check other privileges available with the chosen card. Contact the financial institution and select the right card for your needs.
