How To Use Credit Card Interest Free Period Wisely?
An interest free credit card period is also known as a grace period that ranges between 18-55 days based on the credit card. This grace period lies between the transaction date to the bill payment due date. In this timeline, there will be no interest levied by the bank for transactions the cardholder made till the due date. With a free credit card, can we maximise the benefits of the interest-free period and significantly save on our monthly expenses? Let’s discuss a few pointers that will help you achieve this endeavour.
Tips To Maximise Credit Card Interest-Free Period
Plan Your Transactions
Suppose your credit card billing date is from 5th March to 6th April. You must ensure the payments are made at the start of the billing date. Certain payments on 6th March will provide a 50-day grace period until you have to repay the entire amount. However, if you swipe the credit card in the middle of the month to make a purchase, for example, on 20th March, you will only have 35 days before the payment due date.
Therefore, managing credit card transactions based on a due date helps you enjoy the grace period of the credit card cycle to a maximum extent.
Avoid Making Cash Payments.
Mostly credit cards interest-free or grace period is not applicable for cash payments. The Bank levy a processing fee if you withdraw cash from your credit card. This charge is applicable at all times, even during the interest-free period. Hence, avoid making cash payments to prevent any interest from being added when receiving your next credit card statement.
Keep your outstanding balance to zero.
To enjoy maximum perks from the interest-free period, you must pay back the outstanding credit card balance amount before or at least on the payment due date. Suppose any amount gets carried over from the previous month to your next scheduled billing cycle, and the same is entered in your credit card statement. You will be forced to pay the interest on the outstanding amount, adding more to your bill payments next month.
A smart move here is to make all your credit card bill payments online. Sometimes when you provide a check to pay for your outstanding balance, it may not get credited to the bank due to some technical reason. It can cause delays, and you might pay more interest since you opted to pay through a cheque. Online payment methods such as internet banking, mobile banking, or other recognised party websites and apps could help you pay the remaining balance of your credit card bill amount within the due date without attracting any additional interest.
Manage your expenses across the credit cards
Suppose you possess two free credit cards; you can use the interest-free period advantages by handling your expenses between them smartly. If both of your credit cards have the same billing date, you can enjoy the grace period benefits on both credit cards. By using this approach, credit card bill payments will become much easier.
Example: if your interest free credit card A has a 15th May billing date, and the other interest free credit card B has a billing date set at 1st May, use ‘card A for making purchases, and after the 15th, make purchases on ‘card B’. This method allows you to enjoy a more extended grace period on both of your interest free credit cards. This Interest-free period is a bonus every credit card user must use to enjoy zero-interest benefits on their purchases. However, paying your outstanding balance all at once can be challenging. Plan with it smartly to save a significant amount in the long run.
Follow the rewards
Always go through your free credit card booklet in-depth, especially focusing on the benefits offered & the specific reward programme. Your free credit card can help you grab huge discounts on products & services along with privileges like free lounge access and vital services at the airports. Fetching reward points on your free credit card purchases can help you gain several perks in the long run, from movie ticket vouchers to free flight tickets to maximum discounts on electronic goods.
Owning a free credit card is beneficial, but maximising the perks offered during the interest-free period will be the icing on the cake. All five tips discussed above are easy to follow and, in the long run, can help you make significant savings even when you are spending for making purchases. So, use these pointers to the core when you receive your credit card statement and save big.