Credit Card – What Is Grace Period?
The interest rate for the use of credit card loan is very high. For the use of a certain amount of money, about twenty percent of amount will need to pay as interest to the bank who issued the credit card, it all depends on the issuing bank. It is not profitable for the customers, is not it? But sometimes, some banks offer credit cards with a grace period. It is the period during which you can use bank money with free of charge. Usually it sets by the bank, and it ranges from 25 to 60 days.
This favorable grace period is not so easy to get. This kind of offer is provided only for the proven customers who have proven their reliability and financial independence.
Grace period differs significantly in different banks
Grace period is vary in size, or payment, or methods of calculation. For example, when the grace period is set to 55 days, then within 30 days you can spend the amount, and then, with the advent of the debt on the account is charged in the remaining 25 days period. After this period you will have to pay more money than you spent before. That means, you will need to pay interest on the loan. In some other banks a grace period starts from the date of the use of amount, which means that if the grace period was 55 days, it means the bank gives the customer almost two months to pay the used money.
Credit card purchase is very advantageous if it is continuously used. But if you take a consumer loan, you have to pay the interest charges, since in this case there is no question of a grace period. Credit card can save by paying only an annual fee for its use. When the card is widely used, the sum of savings may exceed the size of the commission.
What is a credit card with a grace period of two hundred days?
Statistics show that almost half of the potential customers of the banks, like to use the service the grace period, the period of interest-free loans. Grace periods usually maximum up to sixty days, but there are limited offerings of grace period to two hundred days. But in any case it is necessary to extinguish the debt in a timely manner. Minimum and thus required payment will be equal to ten percent of the total debt. Reporting period is one month. Once there comes the end of the first period, the bank customer is required to obtain a statement on debt. In the second month of payment, the client makes more certain amount of money so he must do within six months. Next, in the seventh month, the customer must pay in full the amount of the debt until the twentieth day.
Remember, the grace period can be represented only once. If the entire amount of debt repaid on time and without delay, the next grace period can be up to fifty days.