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Weekly Tips

Watch Your Grace Period

Do you know how long you have to pay your monthly credit card bill before interest starts accruing? If you pay balances in full each month (as you ALWAYS should), chances are your card still provides a 20 to 30 day grace period on new purchases. However, that may not always be the case.

In an effort to replace lost revenue due to increased regulation and tough economic conditions, credit issuers may begin focusing even more attention on manipulating grace periods in the future. This is really bad news for those who enjoy using a no annual fee credit card to manage their monthly cash flow interest free. Most, if not all, would rather kick their card to the curb than pay interest.

Protect yourself by tracking accounts religiously online, paying close attention to any communication from card issuers, and always making sure you have backup credit cards to use just in case your preferred card's terms take a turn for the worse. Reducing a grace period is one thing, but eliminating it altogether is certainly cause for taking your business elsewhere. Be sure you leave yourself with the option to do so.

on Sun, 2010-03-21 17:00