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How I Use the Grace Period to Avoid Paying Interest/Push Payments Back - YouTube
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Hi YouTube! It's Yanely here.
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In this video, I'm gonna be talking to you all about
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the grace period for your credit cards.
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I think this is really important to know
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always but I've especially found it
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helpful during the holiday season, when
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I'm going to be buying gifts and things
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for my family. So, I'm gonna use an example from
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you know, the recent past
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something that happened to me to explain it in a little bit
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But first I wanna talk about
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What is the grace period?
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So, a grace period is the number of days or
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the amount of time that you have between
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the last day of your billing period and
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your due date that's printed on your bill.
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Anytime that you make a purchase during
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your billing period, you have a grace period
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right after that billing period
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before the due date to make any payments back
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on your balance due, without paying interest!
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Let's say, for example, you only make the minimum payment
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or you send a little bit more than
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the minimum payment but less than
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the entire balance that you owe
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then you're going to be charged interest
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on the remaining balance.
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But if you pay back the entire balance that you owe
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you won't be charged ANY interest as long as
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you make sure to pay it by your due date.
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So that's why the grace period is really nice
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'cause it's a time where you get
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to borrow money for FREE basically
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which is kind of unheard of, right?!
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You're not gonna go to the bank and get a personal loan
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and they're going to say to you:
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"Don't worry about it, you don't have to pay us..."
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"for borrowing this money, just pay us back exactly..."
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"what you borrowed."
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NO!
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They're gonna charge you interest - right!?
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Nobody's gonna lend you money for free, but
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with credit cards (if you use them the right way)
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you DO have the opportunity
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to only pay back what you borrow and to not
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get charged any interest or fees.
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So that means you have to be paying your entire
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balance by your due date.
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So let's get back to the grace period here.
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My grace period on my jetBlue card
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that's the one that I've been using all year long
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'cause I'm tying to rack up on rewards points,
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So, that credit card I know very well.
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My billing period starts on the 25th of each month
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and it ends on the 24th of the following month.
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And then the bill is - the due date that comes on the bill -
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is gonna be the 21st of the next month.
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So, there's three months here in a row
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that you need to know:
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The opening date of your statement billing period,
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the closing date of your billing period,
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and then the due date for that bill
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-for that billing period.
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So for me, those days are: the 25th, the 24th and the 21st.
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So, for November it was a week of Thanksgiving
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I think it was when I went to you know,
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go shopping for my mom's Christmas present,
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and let's say the day was like November 22nd or 23rd
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let's say it was the 23rd.
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Now, I see this blender that I like
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I wanna buy it for my mom. It costs $100.
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I had the money. It was great. I'm like,
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"Oh, I should just put this on my credit card."
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This is some points, right? But, if
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I do it on the 23rd it's gonna be during
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the billing period that started October 25th
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and ends November 24th.
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And that billing period is gonna be due on the
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due date of the 21st the next month.
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So, that would be December 21st.
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But, if I just WAIT, if I just wait 2 more days...
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Let's say I buy the blender on November 25th instead of
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the 23rd. Then, the next billing period started.
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So that would be November 25th
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to December 24th and that's going to be
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due on the 21st of the next month,
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which would be January 21st.
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So, just by waiting two days,
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I was able to jump into the next cycle, which means
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that my grace period would extend to
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January 21st. So we're talking a big
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difference here, right? It's like I would've
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had to pay back the hundred-dollar blender
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before Christmas basically
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December 21st, if I had bought it
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on November 23rd, versus paying it back
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in next year!
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Paying it back January 21st 2017. So right,
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we're talking about a difference of
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an entire month that could even
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you know, go from one year to the next
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like in my case it did.
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Once you know those - the numbers, you pretty much
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can figure it out for each month
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because it's not going to change right?
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For me, it's always the 25th of one month
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to the 24th of the next month
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anything that was purchased in that time
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is due on the 21st of the third month,
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right? So, I can always figure out
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does it make sense to me
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to make a purchase right now or should I wait a
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couple days or should I wait until
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next week
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that way I can extend the amount of time
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that I have to make payments back,
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especially when we're talking about
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making payments back without being charged interest.
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I hope that was clear. I hope the example
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helped you to understand why
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it's really important to know your grace period
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and be strategic about when you make
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purchases, so that way you can push
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back the time that you have to make payments.
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If you want to know more about this topic,
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I put some links in the
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description box below that you can check out.
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If you have comments or questions,
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as always, put them in the comment section below
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Or you can message me privately
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That's all I have for you guys. Until next time,
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PEACE!
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