Grace period of crediting. How to use it wisely

Advertising persistently assures us that any holder of a bank card can receive money in debt without interest for a sufficiently long time, which can be one to two months, or even more time. Many suspect the suspicion that this is nothing more than an advertising trick. However, to serious banks such machinations can significantly spoil the image. There is no deception here. It is necessary only before signing a contract with a credit institution to carefully study its conditions. So what lies beneath the attractive phrase: "grace period of crediting"?

If to speak literally, this is the period before which you can use borrowed funds, without paying interest. In theory, everything is simple, but in practice, credit cards with a grace period of credit issued by different banks, work differently.

What you should pay attention to

Firstly, the concept of "grace period of credit", as a rule, extends to operations for paying for purchases from the card, and not for withdrawing cash. Exceptions, of course, are, but before you conclude a contract, you need to clarify this point.

The second error that many card users allow is the assumption that you can use the money "free of charge" from the card during the period stated in the advertisement. In fact, this is not always the case. So, if the grace period for loans is 60 days, this does not always mean that you can withdraw money from the card at any time, you can return it within this time and not pay interest at the same time.

In more detail, the "interest-free" use of borrowed funds consists of two stages:

• Settlement (the time when you can spend money from the card);
• Payment (starts after the settlement and is given to fully pay off the debt).

It is these two segments in total that give the promised figure of 50, 60 or even more days of interest-free use of money. With the second stage, everything is simple, this fixed number of days, designated by the bank, often equal to 20. But the settlement period can be determined in different ways. If a new credit card is received , the grace period may start at the moment:

• Activation of the card;
• The first withdrawal of funds from it.

In the future this term can be determined in the same way in different ways and equal:

• The remaining amount of the day before the end of the calendar month;
• A fixed number of days from the time of the action with the card (sometimes equal to the payment period).

So, in the first case, if the amount was withdrawn on 1 day, then the grace period for it will be 50 days (calendar month + 20 days of the payment period), but if you perform a similar operation on the 15th day, then the use of funds will remain (15 days before the end of the month + 20 days of payment period = 35 days).

In the second case, and this is typical of inexpensive plastic, the interest-free period can be only 20 days.

What is the benefit for the bank?

It turns out: a certain amount of time you can use borrowed funds for free. Why do credit institutions go for this? In fact, the grace period for lending is a profitable service for both parties. The user has the opportunity to make purchases on favorable terms for himself (if he manages to pay off the debt on time). Well, the bank will get its rather large percentage (over 20% per annum), in case the client does not pay off the debt at the end of the interest-free stage. By the way, if the card was withdrawn amount of 30,000 rubles, and before the end of the grace period, 25,000 were repaid, then the interest for using the funds will have to be paid not with 5000 rubles, but with the whole amount.

Thus, having carefully studied the terms of the provision of funds, you can competently dispose of them.