Interest Free Period of Credit Card: Credit cards provide a great facility, but it is important to use them correctly, otherwise unnecessary costs may have to be incurred. A special feature is the 45-day interest-free period. Let’s understand this feature and how to take maximum advantage of it.
What is the 45-Day Interest-Free Period?
This is the time when no interest is charged on your credit card dues. This benefit is available on those transactions which are done through the card, but the condition is that you clear the entire outstanding amount by the due date. If you do not make the full payment, then interest starts being charged from the transaction date, not after the end of the interest-free period.
How does the interest-free period work?
The interest-free period depends on two important dates:
• Transaction Date: When you made the purchase using your credit card.
• Due Date: When the bill needs to be cleared.
For example, suppose your credit card billing cycle is from April 1 to April 30 and the due date is May 15. If you make a purchase on April 1, you get a full 45-day interest-free period, i.e. till May 15. But if you make a purchase on April 30, the interest-free period will be only for 15 days.
Why is it important to pay on time?
If you do not pay the entire bill by the due date, interest of 2-3% per month starts to accrue. For example, if you made partial payment for a transaction of April 1, interest will start accruing from April 1 itself, not from May 15.
How to take maximum advantage of interest-free period?
1. Plan purchases: Make big purchases at the beginning of the billing cycle so that you get more interest-free period.
2. Make full payment: Clear the entire bill on time so that interest is not charged.
3. Pay attention to the billing cycle: Keep track of your billing cycle dates and plan accordingly.
4. Avoid Cash Withdrawal: Immediate interest is charged on cash withdrawal from credit card, this is not covered in the interest-free period.
Conclusion
The 45-day interest-free period is an important feature that makes your financial planning efficient. By using it correctly and following the payment schedule, you can make the most of your credit card and avoid interest charges. Use the credit card wisely and make it a powerful financial tool.
