Credit Card Grace Periods Explained (Credit Cards Part 3/3)

I'll explain how the grace period works on your credit cards!
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Credit Card grace periods are very useful if you don't pay interest, but if you do, then you need to watch this video because most of us don't understand how they work. If you're on the bad end of the grace period, then you get to pay interest on all your purchases.
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[@GrahamStephan]

Hey is that vinyl brick or a wallpaper in the background? Looks good!

[@HonestFinance]

It’s fake wall from Home Depot. I’ve never been in love with it, but I’ve been too lazy to change things up. Great job with your channel. I’ve always been proud of you guys for really making the magic happen. It’s hard work

[@GrahamStephan]

Thanks man! I thought it actually looked pretty good haha. I was thinking of doing something similar to create a second youtube set. And yeah, people underestimate how much work is involved for each video...wouldn't surprise me if you spent a few hours just making this 3 min video from planning, filming, editing, thumbnail, etc. It's a lot of work!

[@HonestFinance]

Lots of work for sure. I work in marketing as a photographer/videographer full time, so studio stuff is easy access for me. I film during my lunch breaks and that’s the only way it happens. I just need to learn to be more candid like you. I seriously can’t say more than a sentence before screwing up :)

[@mitcheejee]

@@HonestFinance you'll get it, just keep going

[@winonadaphne6445]

oh man graham i love your videos

[@ellienevitt6489]

Let’s say you owe $1000 on the statement. Do you have to pay it all at once or could you pay in increments. So like $200 one day; $500 another day, and $300 another day (all in the grace period) then you still wouldn’t have to pay interest. Right?

[@HonestFinance]

That’s right. As long as you pay it all off by the due date, you’re fine. Multiple payments is not uncommon

[@slowboybk5098]

Do you start off with a grace period and Do you get charge for not using your credit card

[@HonestFinance]

You start w a grace period. You never get charged for not using your card

[@Frenk33]

1:32 Isn't money borrowed during the grace period not part of the statement balance and thus free of interest charges after the due date? Wouldn't that mean that only the $1 from Jake's statement balance will be charged interest? Why are his $1,000 from the grace period being charged interest after the due date?

[@HonestFinance]

Honestly I think I was wrong in this video. I don’t think you’ll lose your previous grace period, but you will lose the grace period in the future, until you pay off your statement balance in full

[@skulkem5479]

@@HonestFinance if you “think” you’re wrong then you should remove the video or make an updated one. This is the 4th video I’ve watched on the subject and you confused tf out of me with that part that I had to come check the comments for clarification. I also believe you don’t pay interest on grace period from what I’ve seen the past 3 videos

[@dragnar4743]

@@HonestFinance ok, lets say, that jay has now a due of 1$ because he had failed to pay the amount before grace period. So, he has to pay interest on that 1$ now. But, all the purchases during the grace period should be the part of his 2nd billing cycle and he has to pay for those purchase at the end of 2nd billing cycle. Then what do u mean by "losing of grace period"? Do u mean that, after the 2nd billing cycle ends, he would not have the grace period and hence he has to pay the amount in full or else the interest would add up on that amount on a per day basis? like pay the amount of 2nd billing cycle along with per day interest. And the 1$ due from the 1st billing cycle is separate from the 2nd billing cycle.

[@poeskey]

Thank you so much. I just got approved for my first credit card as I figured it was time to build more credit than the small student loans that I had. These videos are very helpful for many of us that are first timers and are trying to not ruin our financial future.

[@MistahUnknown]

@SRC OldSchool What credit card do you use?

[@winonadaphne6445]

good video makes sense thanks

[@lifewithdq1923]

ok so the grace period allows my purchases to be on next months bill, but if i don’t pay my current bill in full by the due date i will lose my grace period and would instantly have to pay what i purchased during the current month?

[@mdinie13]

What if my due date falls on weekend? Do they able to capture the payment during the weekend or it will be considered as late payment?

[@HonestFinance]

I’m pretty sure that’s normal and you’re just fine as long as you made the payment on time

[@jakereed8282]

Wait so if i paid 999 before the statement closing date and paid the 1 dollar 2 days before the due date I’m still gonna have interest.

[@HonestFinance]

If you owe $1,000 on the statement due, pay $1,000 or you’ll accrue back and forward interest

[@AntonioLopez-uj7pu]

So basically your good, just keep in mind that dollar that you pay 2 days before the due date has to be payed by the time the statement hits ( it can be the same day). Also the billing cycle end day is what they report to the credit bureaus too that balance can be payed full before they report it ( payments can take 2-3 days to process), to be on the safe side just pay it off early; I usually keep it at $0 dollars at that point and it ranks up your credit score.

[@AntonioLopez-uj7pu]

The less the utilisation the better.

[@Tediously]

Hey will interest still occur even If I make the minumum payments each month>

[@anthonywilliams9415]

Hella confused. What grace period?

[@ThineLesser]

so ocnfused

[@everettedl]

So if you've lost your grace period and you make new purchases, they get charged interest. What if you pay off those new purchases and have a zero balance by the due date? Will you still get charged interest for them?

[@HonestFinance]

If you pay off the statement balance a couple months in a row , you’ll get your grace period back. Otherwise you will be charged interest on new purchases. Because they charge average interest, if you pay them off quick you won’t accumulate much interest, but it’ll still charge until the grace period is back

[@HonestFinance]

Sorry it’s so confusing

[@everettedl]

@@HonestFinance Ah I see. That explains why I was charged interest. It sucks that they still charge you even if you pay the charges off. So the power is in the grace period I guess. Thanks for answering my question!

[@everettedl]

@@HonestFinance Thanks for that 🙂 It's all really confusing haha, but you helped me out a lot, because I was wondering why I was charged interest when I paid everything off. Now that I know, I'll be able to avoid interest going forward. You rock sir!

[@HonestFinance]

Yup. Just pay off the statement balance every month and you don’t have to worry about losing the grace period or paying interest

[@dwangay5673]

Oh wow! Already made mistakes! Thx!

[@Duck72432]

New to credit card I have used it for 400 as shown in my balance but it says there no payment due this month no minimum or nothing? How do I know when I have to pay it back?

[@HonestFinance]

I’d call them if you’re confused or wait until next month

[@lifewithdq1923]

So just pay the bill on time?

[@MsKim-of1yo]

I currently have $22 pending, what happens if it clears on my due date TMRW will i be charged interest?

[@HonestFinance]

If your statement balance is currently $0, then you have nothing to worry about if charges rolls into the next month

[@ThineLesser]

this guy is incredibly confusing

[@marcgroetsch2216]

So if you pay your minimum it will avoid late fees and won’t consider as a late payment in history, but you will pay interest of course; still better than late fee Plus interest

[@HonestFinance]

Yes. At least pay the minimum to avoid late payments . They can stay on your credit report for 7 years, so I’d avoid anything late at all costs

[@HonestFinance]

If you liked the video, give it a thumbs up if you feel the urge :) Watch more credit card videos: kzbin.info/www/bejne/gaqkkIWvnLuVj8k

[@StacyDriks]

do I need to pay my balance between my due date and closing date after I paid off my entire balance from my due date? or is this for the next billing period? Is this considered part of a grace period too?

[@susyitati6795]

Quick question so minimum payments are not recommended because they are adding internet rates to it. But if I make payments to statement balance in full then I won’t get charged interest?

[@HonestFinance]

Correct. Statement balance paid in full every month doesn’t charge interest

[@walex1101]

PAY IT!

[@Skyflyers]

IM A BIT CONFUSED. PLEASE HELP. My statement date is 15th of the month. I received my fab statement for £7.94p which was due by 8th March I paid the full payment on 20th feb to clear but I used the card again on the 22nd for £200. So this £200 becomes part of the 15th of feb statement and payable by the 8th March which is my due date or this will become payable for the April 8th due date because next statement will be issue on the 15th of March. Thank you for your time and hope I explain it in my way..

[@pixelatedgal7448]

Mehoy minoi

[@pixelatedgal7448]

@A X I forgot I wrote this loo

[@zertbrown4642]

holy 2 months

[@joshuabradley7501]

What if you pay more than the statement balance? Then no interest?