QUESTION: What is a credit card grace period and what does it not apply to?
Answer
A grace period on a credit card is a timeframe during which the bank does not charge interest to the borrower, provided the debt is paid in full. Usually, this period consists of two parts: the time of making purchases and the billing period for generating the statement.
There are many common misconceptions about what exactly this rule applies to. In practice, the grace period does not apply to all financial transactions made using a credit card.
•Cash withdrawals at any ATMs are always excluded from the grace period, and interest starts accruing from the very first day after the money is issued.
•Money transfers to cards of other individuals or to your accounts in other banks are equated to cash withdrawals and are subject to penalty commissions.
•Quasi-cash operations, such as buying cryptocurrency, topping up electronic wallets, buying lottery tickets or traveler's checks, are also deprived of the interest-free period.
•In some banking programs, the grace period does not apply to certain categories of goods or special installments if a separate commission is charged for them.
To avoid unpleasant surprises, always read the credit agreement carefully before signing. Clarify with bank managers or customer support the exact list of operations to which the grace period applies specifically for your card.
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