The credit card grace period

Every self-subscribing bank issues credit cards to its customers. Their main feature is the interest-free or love period of the institution’s use of money or the love period.

The grace period is the period during which the borrowed money from the bank can be returned without interest. The main prerequisite is that this should be in full and before the end of the set period. It seems that the bank is completely unprofitable. Service – grace period. In fact, there are a lot of non-binding people today. It pays interest and sanctions and ensures that banks profit.

What is the real advantage?

What is the real advantage?

The responsible debtor, who wisely weighs all the advantages and disadvantages, easily uses the bank’s funds and earns his money for himself (for example by making a good contribution).

Most consumers of banking services do not always come into question and understand the system of grace. In fact, it is not difficult.

Today, banks divide the grace period into two parts. The first is about 30 days and allows you to make transactions on credit. The second, about 20-25 days, is intended to repay the loan. As a result, the grace period can take up to 55 days (depending on the date of purchase).

There are only two loan options offered by banks: the benefit period starts either from the moment the purchase was registered or from the date the bank established it.

If the discount starts on a date set by the bank

If the discount starts on a date set by the bank

If you have a card with a grace period such as Type typically starts counting from the first day of the month or from the time the card is activated and lasts an average of 30 days. In addition, all transactions are summarized and should be credited to the bank account by the end of the reporting period.

Such privileges are considered volatile, For example, buying closer to the end of the month has a shorter interest-free loan. However, the number of payments per month is the same. For consumers who shop frequently, this option is most appropriate.

Just remember the beginning and end of the grace period and the date of the monthly payment. Usually, banks will, in accordance with the grace period, send a monthly electronic statement or SMS to the client stating the amount of the debt and the date of its deposit to the bank.

If the discount starts from the moment of the transaction

If the discount starts from the moment of the transaction

In this case, everything seems easier. The interest-free repayment period starts on the day of purchase and lasts an average of 30 days (depending on the institution). However, if the cardholder with a grace period makes many small purchases, there is the possibility of simply confusing both the recoverable amounts and the dates. 

They can occur if the client ever forgets to repay the debt or make the required monthly payment. In this case, the bank will charge interest for both the remaining duration of the loan and the preference. You can use one of three ways to pay off your debt:

  1. Enter the amount agreed by the bank at any of its branches.
  2. Deposit cash into the creditor’s bank account.
  3. Replace the wire transfer at any suitable terminal.

One nuance has to be considered here. Only money deposited in the issuing bank (first option) will be credited to the account on the same day. Payments from other banks can take up to three business days.

There is also such a condition the institution has issued a credit card as a mandatory payment. This monthly payment is specified in the contract and usually does not exceed 10% of the loan. Ignoring these payments, even if the borrower pays interest, is subject to penalties and blacklists.