Understanding The Interest-Free Period On Your Credit Card

By | February 23, 2016

The interest-free period on your Credit Card

Has the term ‘interest-free period’ on your Credit Card payment left you raising a doubtful eyebrow or rolling your eyes with scepticism?

If you can smartly and wisely utilise the interest-free period on your Credit Card, you can actually end up saving quite a few bucks. Want to know how? Read on!

What’s an interest-free period?

The interest-free period starts with the first day of the statement period (billing cycle) and usually ends 15-25 days after the last day of the statement period.

In other words, the interest-free period is made up of the monthly statement period plus the time you get to pay your statement balance. This can vary between 45-55 days depending on your billing cycle.

For instance, let’s assume that your statement is generated on the 25th of every month. Now let’s say the statement period is from 25th April to 24th May, and the due date for bill payment is 10th June. This means that the last day of interest-free payment for purchases made during the period of 25th April to 24th May is 10th June.

How to benefit from the interest-free period?

In order to reap the benefits of the interest-free period on your Credit Card, you can follow these simple yet effective steps:

Planned approach

To make the most of your interest-free period, start making your purchases at the beginning of your Credit Card statement period. This way, you will end up enjoying a longer repayment period which is interest-free since the bill will get generated only on a specific day of the month. So start shopping early and continue till your bill gets generated!

Pay your bills wisely

Always remember to pay the closing balance of your Credit Card in full before the due date to avoid interest charges and retain your interest-free period in the next statement cycle. In case you only pay the minimum amount due on your Credit Card, you end up losing your chances of enjoying a longer interest-free period.

Additionally, paying your Credit Card bills on time will help boost your CIBIL Credit Score as well. A good Credit Score will always stand you in good stead in future if you plan to opt for a loan. Two birds, one stone as the popular cliché goes!

Monthly billing cycle

Each Credit Card user’s monthly billing cycle is different. Check yours to see when your month begins and calculate the interest-free period accordingly. If you are not sure about your monthly billing cycle, call the customer care of your Credit Card company or bank and speak with them to understand your billing cycle. Don’t make assumptions – clarify and be informed!

So now that you know about the interest-free period on your Credit Card and how you can get maximum bang for your buck, explore some Credit Card options right away!

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