How does the grace period on credit cards work?

[NinjaGnome]

Ok I am looking to get my first credit card but am confuse about the grace period. Does the grace period mean that if you pay the full amount within 20 dyas of getting your bill you dont have to pay interest? Or does it mean if you pay it within 20 days of the purchase?
Clarification on this would be greatly appreciated.

 

[spidey07]

most calculate interest on a average daily balance. So your average daily balance is what determines interest charge - charge 10K on the first day of the billing cycle your average daily balance is 10K.

Pay the balance in full before the grace period = no interest charged. So pay the balance every month.

Cash advances mean interest accrues immediately with no grace period, which means never take cash from a credit card.

so yes you are correct.

 

[sniperruff]

grace period is the time from the date that the bill is issued to the due date of the balance. you do not pay interest between the time you made a purchase and the end of the balance due date

 

[NinjaGnome]

coorect on which one? paying the full balance 20 days after you make the purchase or 20 days from when you get your bill? im confused because if its 20 days after purchase how are you suppose to pay that?

 

[NinjaGnome]

Originally posted by: sniperruff
grace period is the time from the date that the bill is issued to the due date of the balance. you do not pay interest between the time you made a purchase and the end of the balance due date

Ok easy enough, thats what I was confused about, sometimes i put too much thought into things.

 

[sniperruff]

Originally posted by: NinjaGnome
coorect on which one? paying the full balance 20 days after you make the purchase or 20 days from when you get your bill? im confused because if its 20 days after purchase how are you suppose to pay that?

junk the whole grace period concept. here's an example:

jan 10- $10 purchase made at gap
jan 12- charge was applied to credit card
jan 16- lets say this is the statement closing date

so now if grace period = 20 days, then 20 days after jan 16, or the "balance due" date on the statement, you'll have to pay the $10. it does not matter when did you make the purchase or what time gap charges your card.