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Understanding and Managing Your Credit Card Grace Period

At O1ne Mortgage, we prioritize consumer credit and finance education. This post aims to provide an objective view to help you make the best decisions regarding your credit card grace period. For any mortgage-related needs, feel free to call us at 213-732-3074.

What Is a Credit Card Grace Period?

A credit card grace period is the time between the end of your monthly statement cycle and your due date. Typically lasting 21 days or more, this period allows you to avoid interest charges on your purchases from the previous billing cycle if you pay off your balance in full. Note that grace periods do not apply to balance transfers and cash advances.

How Can You Lose Your Grace Period?

There are several ways you can lose the grace period on your credit card:

• Not paying your statement balance in full: If you carry a balance from one month to the next, your card issuer will charge you interest on the unpaid balance and on new purchases starting from the date of the transaction.
• Missing a payment: Missing a payment by even one day can result in interest charges on the unpaid balance plus a late fee. Additionally, interest will start accruing on any new purchases from the date of the transaction. A payment late by 30 days or more can also harm your credit.
• Balance transfer promotions: If your card offers a 0% APR on balance transfers but not on purchases, new purchases will accrue interest from the date of the transaction as long as you have an outstanding balance from your transfer.

How Can You Restore Your Credit Card Grace Period?

Restoring your grace period is straightforward. If you’ve lost it due to a missed or partial payment, start paying your balance on time and in full. If you don’t have a grace period due to a 0% APR balance transfer promotion, consider using a different credit card for purchases until you’ve paid off your balance transfer.

How to Pay Down Your Credit Card Balance Fast

Depending on your situation, here are some steps you can take to pay down your credit card balance quickly:

• Cut discretionary spending: Temporarily reduce spending in areas of your budget and reallocate that cash flow toward your credit card balance.
• Sell unused items: Sell items you no longer need or use through an online local marketplace.
• Take a temporary job: Consider taking on a temporary job or seeking overtime hours at your primary job to put that income toward your credit card payments.
• Avoid using your cards: Stop using your credit card for new purchases to avoid accruing more interest and making it harder to achieve your goal.

Monitor Your Credit as You Pay Down Credit Card Debt

Accumulating a large balance is not only expensive but can also hurt your credit score. Prioritize paying your balance in full each month and monitor your credit as you pay down your debt. With O1ne Mortgage’s free credit monitoring service, you can access your credit report and score for free, making it easy to track your progress and address potential issues as they arise.

For any mortgage-related needs, call O1ne Mortgage at 213-732-3074. We’re here to help you make informed financial decisions.

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