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How is the Credit Card Grace Period Established?

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Purchasing a Credit Card is the easiest thing to do and to shop using it is even easier. With just a swipe, the transaction is made, and the best part is that the moneyisnot withdrawn from your savings account. You pay off this amount at the end of the month or in the form of small instalments set by your bank, you slowly pay off the debt. The duration offered to clear the dues by the Credit Card company, for which no penalty is chargeable is termed as the grace period. Your billing cycle gives you a defined time-limit to clear the dues. In between this period, no interest is to be paid by the cardholder. However, the grace period varies for different customers. For a salaried person it revolves around a month, in general, but what are the factors involved in deciding the grace period and how is it established?

Usually, SBI Credit Card and most of the card issuersoffer a grace period of minimum twenty-one days to the cardholders. This means your billing cycle has to cover a minimum of 21 days and the company must deliver your statement before 21 days of your due date of payment. The due date for the payment shall remain the same thereafter; the company does not hold the right to make any changes in it. On the due date as well, you can make the payment before the time stipulated in your agreement, to save your hard earned money from going away as Credit Card interest. If the due date falls on a weekend or a government holiday, the next working day will be counted as the due date. The maximum time offered by Credit Card companies as the grace period is 25 days.

Behind your Credit Card statement, there are certain things mentioned, to which you need to pay heed. It talks about how your finance charges are calculated, how you can find a copy of your Credit Card agreement on your card issuer’s website or via e-mail. However, nowhere it is mentioned that how this grace period is calculated. The agreement offered by the Credit Card companies does disclose the grace period that will be provided to you by them.

The Credit Card company is not bound to give you a grace period. There are conditions when no grace period is available for the cardholder. For instance, if your balance amount is being transferred for next month, again and again, you are no longer eligible for a grace period. Keep your interest as low as possible when using a card, since there is no point in reducing the grace period of your card. You may not have it eventually when there would be an actual need for the same. It is always recommended to start your billing cycle with zero balance, to avoid any incurring charges.

When you Apply for a New Credit Card Online, you can check a service agreement before you get yours, from a database of the accords that will help you understand the utility as well as precautions for using a card. As per a new regulation, declared by the Reserve Bank of India (RBI), three more days have been added to the grace period. On July 16, 2018, a circular was issued to companies to give more time to the customers for paying off their Credit Card bills. The top Credit Card companies have informed their clients about this revision in policies approved by RB. The governing body has not only thought of the consumer’s interest but for the company’s as well. The customer will now get some more time to clear the dues. While if the payment remains due even after ninety days of the due date, the credit card will be considered as a non-performing asset.

An additional three day grace period has been offered considering technical issues like the ill-functioning of the server or some other glitch. The forgetful users may also get some time to save themselves from the unwanted payment of interest. This step has been taken by RBI to establish a Credit Card discipline. The benefits or the adverse effects of the same would be known only after some time.

To avail the benefits of this grace period, it being a variable, the client needs to calculate it precisely. If you know, that you will have to travel to a specific location and you do know the date, then you can book the tickets on the very day or near to the time when your statement period closes. In this way, you will have an extended grace period for paying off the credit. Credit Cards are a game of intellect, manage your finance with great dexterity when using a card.

To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 60+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.

Talk to our Loan Specialists toll-free at 1800 103 4004 to know more about our products and offers.

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