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Credit Card Interest-free Period: Everything You Should Know!

A complete guide to interest- free period on credit card

By Kirti BhargavPublished 2 years ago 4 min read
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Do you find yourself struggling with clearing credit card dues along with the heavy interest charges? If this is the case, then the interest-free period can be a blessing in disguise. Being a credit cardholder, you may have an idea about the interest-free period on credit cards. Before jumping straight into knowing how this period works and how you can make the most out of it? Let’s begin with what an interest-free period is and how it is calculated.

What is an interest-free period?

An interest-free period is one in which you do not have to pay any extra charges while clearing your credit cards dues. Clearing your dues beyond the provided grace period attracts interest charges.

An interest-free period is nothing but a monthly billing cycle plus a grace period of 15-20 days which can be summed up to 45-50 days. During these days you can clear your credit card dues without having to worry about interest charges.

Say, for example, you made a transaction on 1st January 2022 using your credit card, according to the interest-free period your credit card bill due date would be between 18th Feb to 21st Feb 2022.

Another term that you must know is billing cycle/billing date. This cycle constitutes a month and after a month you receive your credit card bill. For instance, you will get the credit card bill for January 2022 (starting from 1st Jan) on 1st February 2022. A credit card interest-free period is important as it gives breathing room to manage your finances.

How to manage an Interest-free period?

Managing an interest-free period is important while being responsible for clearing the credit card dues at the same time. But there are certain things you must keep in mind so that you can manage the interest-free grace period well on your credit card and they are:

Always clear your credit card dues in full. Never fall into the trap of paying the minimum due amount as it only attracts interest charges.

Note that the grace period is not applicable on cash advances and the revolving balance. So, avoid withdrawing cash through credit cards.

Get yourself clear with all the terminologies related to credit card bills and grace period, so that you can make the most out of your credit card.

Make the big purchases at the beginning of your billing cycle as you will get 45-50 days to manage your funds to repay it.

You can divide your transactions on multiple credit cards as they all will have different due dates that give you the freedom to repay the credit card dues with more ease.

Apply for the best low interest credit cards to enjoy both grace period as well as low-interest charges on your credit card due amount so that it helps you in managing your credit card.

How to not miss the credit card due date?

Paying your credit card bills is very important for maintaining a good standing account. You can surely build a good credit history with a credit card only when you keep your dues clear in full. Missing the due date hurts your credit history and it is strenuous to remember due dates while juggling around a lot more other things.

The best way to not avoid missing the due is by registering for the auto-debit services. Using this service allows you to relax as the credit card bill amount gets deducted automatically on the selected date of your choice.

Bottom Line

To conclude, you may find that the interest charges are not that high at least on two monthly billing cycles but if it continues to accumulate for more than two months you will see that in the long run you will be burdened with heavy interest charges. So, it is better to make the most out of an interest-free period and clear all your credit card dues in full during this period only. You get a grace period of 45-50 days to clear the credit card dues. Plan your monthly budget and use your credit card accordingly so that you can make big purchases at the beginning of your billing cycle as it provides you more time to clear it.

Share your tips on how one can make the most out of a credit card interest-free period in the comment section.

personal finance
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About the Creator

Kirti Bhargav

Financial Content Writer at Cardinsider.com

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