How Credit Card Grace Periods Work

It's mind boggling how complicated they make these credit cards. Let me go through how you can keep your grace period and how to get it back if you loose it.

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[kevineusebio]

I missed a due date once without my knowledge. Since I had no idea I no longer had grace period I accrued interest on large purchase I made at the time and paid a total of $150.01 in interest over the course of 5 months.

That's the reason why I started learning more about personal finances and taking advantage of them instead of them taking advantage of me. I'm still up $500+ after years of 1% cash back on that old credit card, but boy did that $150.01 felt like a slap in my face

[ericmiller]

Thank you for explaining this so clearly. Other videos don't explain it so well. This was clear and concise. I've copied the graphic and it's on the fridge for my wife and me. Appreciate it.

[falcoperegrinus]

I remember back in 2008 before I was a "winner" in the credit card game. Had no idea about signup bonuses (and probably missed them), didn't understand rewards, and always carried a balance. I was young and dumb! Now I know what I'm doing and I still enjoy watching videos like this. Would've been great if these were around when I got started!

[shopwithmichaela]

This makes so much since. So far we have payed down on our capital one credit card and It went up about 100 points by paying before the statement date and leaving an 0% utilization on it. We are going to continue doing that and hopefully it goes up even more.

[thinkbumove]

Beat the Bank! Your information is always💰very easy to understand🌻and right to the point❤️ Thanks for all the love✌🏾

[Gohan]

I keep telling people to pay their cards off every month, & they always say to carry a balance so my score goes up. I'm at 780 so far, I think I'm doing it right. Just always pay off what you spend every month asap b4 the due date. No interest & Grace period for life!! 🤙🏻This channel is awesome !Subscribed! I say let the banks work for us & not the other way around.

[Rajkumar]

Thank you very much for explaining in this detail. It is very helpful keep making such informational videos.

[jessiepeng]

the example of how leaving $1 in the balance affects the interest and grace period and all that really explained a lot of things

[Popunkwillneverdie]

I built someone's insurance once and now he's crazy enough they took my advice

[WolfieGod]

I am still confused on what my grace period is. I know statement date and closing date. Well ima explain it the way I think it is. After paying off the full balance for one month i can spend however much I want until the coming month and it’ll give me a new statement date and closing date to pay off the new balance which is the month after. So I pay off October spend however much I want during November and pay that off in December?

[SunkissNia]

thanks for explaining it very well. I swear I'm not a slow learner but I just never had a c.c. and I kept getting confused about how to do this or that

[manskimix]

I too am guilty of keeping a balance thinking it's helping my for sharing this....I now see the light!!!

[PartyBoiRokk]

I think the idea is keeping a balance after the statement date but then paying it completely off before the due date so the balance is reported on your credit report as a 1-7% utilization vs a 0% utilization. Your example shown in this video is keeping a balance after the due date which causes you to pay interest and lose your grace period. That's not the correct strategy.

[ImportsandExotics]

Let's say that my statement balance is $200 (closed on Jan 20), but make an additional purchase of $50 (on Jan 21). As long as I keep paying my statement balance in full ($200), I won't lose my grace period and be interest free?

[Naural]

Question. I have a 300 credits card limit. I spent 300 and before the statement I pay 250 back and 10 day later before it due I pay the 50 dollar. Is that ok?

[jaimeguevarrajr.]

I am currently with TD bank with maximum of i believe 14 transactions per month. so what I do is paying at least 100 dollars on top of my credit card balance anticipating my future spending on the next billing cycle. I never knew about grace period on credit card, but now, I can further tune up my paying cycles. thanks.

[OhWaker]

So, if I don't want to pay any interest, I want to make sure my utilization rate is 0% before the due date, and I want my credit card company to give me a bigger credit limit, I should spend as much as possible (from regular spending) of my limit, pay it all off about 3-5 days before the due date, and then don't use my credit card (using my debit card for food, etc) until the day after the due date?

[officialpowerofbanana]

good job, you covered this pretty well

[zertbrown]

I noticed the grace period is the same length as payment due period

[jayinla]

The "weird reason at 2:11 is to show a payment "on time" track record on the payment history matrix of each account on cresit reports which is 30% of credit scores. Correct? (Eventhough the grace period hack you describe is lost, in carrying the hypothetical 1 dollar at due date) payment history is more valuablewou ok dnt you agree? Just use a different card so you dont get retractively charged interest on the purchases before the due date.