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Grace period... Watch out


Credit cards offer clients a continuous form of loan. When you apply for a card some pieces of information should be clearly described.

Keep in mind that not all CreditCards are created alike. It is true when choosing among bank cards - Visa, MasterCard. Usually credit terms of these cards vary widely. One of the most important factors is grace period. This time period is important if client tends to completely pay off his/her balance every month. If the credit card doesn't offer a free period, fixed interest rate will accrue with every new purchase. It is important to remember that the grace period implements only if cardholder pays the balance in full. For example, the bank may say cardholder has 30 days from a statement date, provided the client paid his/her previous balance fully by the due date. If the cardholder pays for his/her purchase entirely during that time, he/she isn't required to pay any interest.

The grace period commonly applies to new purchases. Many credit cards don't offer a grace period for balance transfers, cash advances. If the credit card includes a free period, the issuer have to mail the client's bill at least fourteen days before the due date. Thus, cardholder will have enough time to pay.

Remember that a number of card issuers have shortened the billing cycles. It means that clients have less time to pay their bills/shorter grace period, prior to being charged late and interest fees. The federal law requires that CreditCard payments be credited to accounts on the day of receiving, but there are different gaps. Issuers require that the payments arrive for the payment by 10 a.m. (for example) to be posted on that day. Any other payments that don't confirm to the issuer's requirements (payment by check/money order, using the envelope provided, inclusion of payment coupon, etc.) may be posted as late. Moreover, federal law doesn't cover different payments made electronically.

Thus, a credit card can turn into an expensive payment option if a cardholder is not able to pay a balance on his/her account within the grace period (usually up to 30 days). It's important to read all the details of the credit card offer carefully before applying for it. As usually, learn all you can to make a reasonable decision.

Things to know about creditcard billing statement

Billing statement is a regular (usually monthly) statement that lists all the payments, purchases, other credits and debits made to a creditcard account during the billing cycle. It is recommended to check your card statement each month. If there is a lot of information in the billing statement, review the balance and the transactions made to the account.
A billing statement lists all clients need to know about the creditcard account. The creditcard statement includes:
- the minimum payment due;
- the previous balance;
- contact information of the bank;
- fee for the late paying;
- the payment due date;
- the number of days in billing period;
- credit limit;
- rewards earned;
- total amount of fees and interest paid year-to-date;
- available credit;
- list of payments, interest, cash advances, purchases, credits, balance transfers, fees, and other debits made to this account.

The billing statement is usually sent at the end of the billing cycle to the client's mailing address. The billing statement must be sent at least twenty-one days before a due date. Thus, the borrower has time to make the creditcard payment and avoid extra fees if grace period applies to the balance. Cardholders can also sign up for paperless billing, so they may view their card statements online. Thus, paperless statement is an electronic version of client's mailed statement.
Remember, that a substantial reason that you should carefully review your card statement is to make sure the information is correct. If there is a billing error, you can dispute it within sixty days. The billing statement includes account activity during a billing cycle. Transactions that made before/after a billing cycle won't be reflected on the billing statement.
Cardholders may not receive billing statements if there was no activity on the account during the previous billing cycle and if the account is empty. If the card issuer didn't get the correct address from its clients, they also may not receive the billing statements. You should call the bank if you didn't receive a statement for a particular billing cycle.

2015.10.12 Olivia D.
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