Looking after all of the different ins and outs of credit cards can be overwhelming, especially when you’ve got a variety of card types from various institutions and creditors. A key component to getting the most out of your credit cards is understanding the details of a card’s grace period which is, effectively, the increment of time between when your billing cycle ends and when your payment is due. It can be a real game changer for your finances.Here, we’re going to run down some of the best ways to maximize your credit card’s grace period.
The first and most obvious thing you’ll need to make sure of is: does your credit card even offer a grace period? Often, you may not even realize you’ve lost it in the event you’ve carried over a balance from one month to another. If you don’t have that grace period, you’ll probably be charged interest from the date of purchase. Needless to say, that’ll add significant, unwanted expenses to your monthly bill.
Grace Period Breakdown
If you do have a grace period, there is a very simple strategy you can employ to get the most out of your credit card. You’ll want to make any larger purchases at the beginning of your billing cycle, then pay your outstanding balances when they’re due 51 days later to be on the safe side.
Where does the number 51 come from? 30 days for the billing cycle + a 21 day grace period = 51 days. However be aware; failing to make a payment in full on the outstanding balance will incur interest, not to mention it’ll most likely get you stripped of that grace period.
Changing Your Due Date
Another helpful tip to keep in your back pocket is that many credit card issuers will allow you to change your due date as long as your account is in good standing. Of course, if you do have a large outstanding balance, they likely won’t allow this.
0% APR & Zero Transfer Fees
While 0% APR intro offers are a different advantage than optimizing your grace period, they’re still an excellent way to reduce your interest if or when you do carry over an outstanding balance on your card.
You’ll want to make sure that the “transfer fees” aren’t actually just the equivalent of a standard monthly APR. Keep an eye out for zero transfer fee opportunities, so you can use the offer period to reduce your balances and get ahead of the game.
Sign Up Bonuses
Sign up bonus offers are typically only paid after the minimum spend is met within the preset time frame of the offer. That being said, most average card users cannot meet the minimum spend for, say, a premium credit card with sign up bonuses within one payment period. This is where maximizing that grace period comes in: the user will need to meet that minimum spend immediately after their statement closes to ensure a full month of a free float.
On average, a card user’s concern here is simply meeting the minimum spend in the required timeframe in order to successfully achieve and attain that sign up bonus. One trick to keep in mind here: getting a new card solely for a one-off, massive purchase. If you’re on the market for a large purchase, and you know the price of the said purchase will well-meet the sign up bonus offer of a particular card, you can simply apply and use that credit card on that big purchase. It’ll be the first purchase of the card and, as long as you pay it off within the appropriate time frame, it should more than get you that sign up bonus.
There are myriad things to keep track of when it comes to credit cards, though once you understand what those items are, it’s actually pretty easy to use and maximize your cards to their fullest potential. Understanding not only the ways to stay on top of your cards and payments, but also what your cards can do for you, is an essential piece of the successful personal finance puzzle.
Want to keep track of your credit card sign-up bonuses? Download the Card Curator app in the Apple App Store or on Google Play and you’ll be meeting the minimum spend in no time!
Written by John Garner John Garner is the founder & CEO of Card Curator. John spent 5+ years as a volatility trader for Merrill Lynch before deciding to start Card Curator and follow his real passion: credit card rewards and travel. To date, he has visited almost 90 countries by using rewards earned from 100+ credit cards. He’s an expert in all things related to credit cards and free travel, and loves helping others crack the code in the points and miles game.