topic Re: How to restore a grace period? in Credit Cards

How to restore a grace period?

Anonymous — Sun, 20 Jun 2021 21:55:42 GMT

I have been confused about this for awhile and would like to understand how it works.

Let's say I have a 0 APR card whose promo period is going to end soon, I understand that if I want to restore the grace period and not pay interest after the promo period ends, I have to pay in full for 2 consecutive statement cycles, but what I don't know is am I required to pay entire FULL balance or just the STATEMENT balance only? In another word, do I have to keep this card reporting 0 balance for 2 months to get my grace period back, or it's fine if I just pay the previous balance in full for 2 months?

Re: How to restore a grace period?

OmarGB9 — Sun, 20 Jun 2021 22:03:38 GMT

Full balance and any new charges you make.

Re: How to restore a grace period?

Koopa — Sun, 20 Jun 2021 22:10:59 GMT

You just have to pay the statement balance in full, two statements in a row to restore the grace period with all of the issuers that I'm familiar with.

edit: AmEx and Chase are the only ones I've carried a balance with and that's definitely how it works with them. After paying the first full statement balance, you'll get the residual interest and then after the second consecutive full statement balance payment then no more interest charges.

Re: How to restore a grace period?

Remedios — Sun, 20 Jun 2021 22:11:21 GMT

@Anonymous wrote:
I have been confused about this for awhile and would like to understand how it works.
Let's say I have a 0 APR card whose promo period is going to end soon, I understand that if I want to restore the grace period and not pay interest after the promo period ends, I have to pay in full for 2 consecutive statement cycles, but what I don't know is am I required to pay entire FULL balance or just the STATEMENT balance only? In another word, do I have to keep this card reporting 0 balance for 2 months to get my grace period back, or it's fine if I just pay the previous balance in full for 2 months?

If you are currently in 0% promo, there is no need to restore grace period.

Grace period needs to be restored only if you are already paying interest.

Your lender provides the date on your statement when the 0% promo expires.

You want to pay the previous month statement in full by that date, and continue paying statement balance in full going forward.

If you are already paying interest, some lenders allow for grace period to be restored with only one statement, others require two.

Without knowing which lender you are talking about, there is no way to tell.

Re: How to restore a grace period?

Anonymous — Sun, 20 Jun 2021 22:19:30 GMT

it's a citi card if that's relevant

Re: How to restore a grace period?

Koopa — Sun, 20 Jun 2021 22:57:29 GMT

Citi, according to the credit card agreement of the card I checked, also takes 2 billing periods to restore the grace period.

Re: How to restore a grace period?

HeavenOhio — Mon, 21 Jun 2021 00:54:50 GMT

@Anonymous, what's relevant in this case is what @Remedios said. Pay your statement balance in full before the end of the 0% intro promo, and you'll be good to go. Think of the 0% period as a long protracted grace period.

If you were paying interest, it would make sense to make a call to customer service to make sure you understand exactly what's required of you. Sometimes, they're able to give you a paydown amount that'll cover trailing interest and restore your grace period more quickly.

Re: How to restore a grace period?

frugal47374 — Mon, 21 Jun 2021 04:35:37 GMT

@Remedios wrote:
If you are currently in 0% promo, there is no need to restore grace period.
Grace period needs to be restored only if you are already paying interest.
Your lender provides the date on your statement when the 0% promo expires.
You want to pay the previous month statement in full by that date, and continue paying statement balance in full going forward.

Citi's statement says if you didn't pay your New Balance in full by the due date, you have to do that 2 months in a row to avoid paying interest on new purchases.

Now, when the interest rate is 0%, that's not a problem. But when the 0% deal ends, I always thought this meant I needed to have two statements paid in full before I could make purchases if I wanted to avoid paying interest.

Do I have that wrong?

Re: How to restore a grace period?

Remedios — Mon, 21 Jun 2021 11:57:23 GMT

@frugal47374 wrote:
@Remedios wrote:
If you are currently in 0% promo, there is no need to restore grace period.
Grace period needs to be restored only if you are already paying interest.
Your lender provides the date on your statement when the 0% promo expires.
You want to pay the previous month statement in full by that date, and continue paying statement balance in full going forward.
Citi's statement says if you didn't pay your New Balance in full by the due date, you have to do that 2 months in a row to avoid paying interest on new purchases.
Now, when the interest rate is 0%, that's not a problem. But when the 0% deal ends, I always thought this meant I needed to have two statements paid in full before I could make purchases if I wanted to avoid paying interest.

Do I have that wrong?

Yes, you do.

If you pay statement balance by the date 0% expires, there is no residual interest.

Situation you described above is only applicable when balance is carried outside of 0% promo.

In that situation, two statements are required to restore grace period.

Re: How to restore a grace period?

frugal47374 — Mon, 21 Jun 2021 12:20:28 GMT

@Remedios wrote:
@frugal47374 wrote:
@Remedios wrote:
If you are currently in 0% promo, there is no need to restore grace period.
Grace period needs to be restored only if you are already paying interest.
Your lender provides the date on your statement when the 0% promo expires.
You want to pay the previous month statement in full by that date, and continue paying statement balance in full going forward.
Citi's statement says if you didn't pay your New Balance in full by the due date, you have to do that 2 months in a row to avoid paying interest on new purchases.
Now, when the interest rate is 0%, that's not a problem. But when the 0% deal ends, I always thought this meant I needed to have two statements paid in full before I could make purchases if I wanted to avoid paying interest.

Do I have that wrong?

Yes, you do.
If you pay statement balance by the date 0% expires, there is no residual interest.

Situation you described above is only applicable when balance is carried outside of 0% promo.
In that situation, two statements are required to restore grace period.

OK, I pay it off before the 0% expires.

And shortly after that payment and after the 0% expires, I make a purchase. Since I did not pay my New Balance in preceding months, doesn't interest start immediately for my new purchase?

Re: How to restore a grace period?

Remedios — Mon, 21 Jun 2021 17:36:48 GMT

@frugal47374 wrote:
@Remedios wrote:
@frugal47374 wrote:
@Remedios wrote:
If you are currently in 0% promo, there is no need to restore grace period.
Grace period needs to be restored only if you are already paying interest.
Your lender provides the date on your statement when the 0% promo expires.
You want to pay the previous month statement in full by that date, and continue paying statement balance in full going forward.
Citi's statement says if you didn't pay your New Balance in full by the due date, you have to do that 2 months in a row to avoid paying interest on new purchases.
Now, when the interest rate is 0%, that's not a problem. But when the 0% deal ends, I always thought this meant I needed to have two statements paid in full before I could make purchases if I wanted to avoid paying interest.

Do I have that wrong?

Yes, you do.
If you pay statement balance by the date 0% expires, there is no residual interest.

Situation you described above is only applicable when balance is carried outside of 0% promo.
In that situation, two statements are required to restore grace period.
OK, I pay it off before the 0% expires.
And shortly after that payment and after the 0% expires, I make a purchase. Since I did not pay my New Balance in preceding months, doesn't interest start immediately for my new purchase?

Could you please look at your statement, there is a box that tells you when it ends.

Also, we would need to know statement closing date to tell you when to pay what.

PS:

That's not a royal "we", that's just me saying *someone other than me needs to math*

Re: How to restore a grace period?

NRB525 — Tue, 22 Jun 2021 02:44:28 GMT

@frugal47374 wrote:
@Remedios wrote:
@frugal47374 wrote:
@Remedios wrote:
If you are currently in 0% promo, there is no need to restore grace period.
Grace period needs to be restored only if you are already paying interest.
Your lender provides the date on your statement when the 0% promo expires.
You want to pay the previous month statement in full by that date, and continue paying statement balance in full going forward.
Citi's statement says if you didn't pay your New Balance in full by the due date, you have to do that 2 months in a row to avoid paying interest on new purchases.
Now, when the interest rate is 0%, that's not a problem. But when the 0% deal ends, I always thought this meant I needed to have two statements paid in full before I could make purchases if I wanted to avoid paying interest.

Do I have that wrong?

Yes, you do.
If you pay statement balance by the date 0% expires, there is no residual interest.

Situation you described above is only applicable when balance is carried outside of 0% promo.
In that situation, two statements are required to restore grace period.
OK, I pay it off before the 0% expires.
And shortly after that payment and after the 0% expires, I make a purchase. Since I did not pay my New Balance in preceding months, doesn't interest start immediately for my new purchase?

One must take the entire card balance to zero to reset the grace period.

It may work out that paying two Statement Balances while continuing to use the card gives someone joy, but my experience reverts to "stop using the card and zero it" for at least one statement. And if you get a $1.50 or $2.00 Minimum Interest charge, well you have to whack that quick to keep from getting on a cycle of minimum interest triggering minimum interest. That happened to me once on US Bank.

Paying to zero prior to end of 0% APR, and no new charges to that statement date is the safest bet.

Re: How to restore a grace period?

frugal47374 — Tue, 22 Jun 2021 04:00:06 GMT

@Remedios wrote:

Could you please look at your statement, there is a box that tells you when it ends.
Also, we would need to know statement closing date to tell you when to pay what.

This was my situation. 0% period ended 6/1/21. My statement closes on the 2nd (normally) with due date on the 28th.

So on 6/1 I paid my entire balance. 6/2 statement has no "new balance". Since this is Citi, my interpretation of their "two statement" rule is to let 7/2 close with no balance (and no purchases). Only after that happens do I think I could make a purchase without having interest start immediately.

Re: How to restore a grace period?

FalconSteve — Tue, 22 Jun 2021 11:28:13 GMT

If you're in a 0% period, you're fine. If you're more comfortable, call Citi

Re: How to restore a grace period?

Remedios — Tue, 22 Jun 2021 12:20:05 GMT

@frugal47374 wrote:
@Remedios wrote:

Could you please look at your statement, there is a box that tells you when it ends.
Also, we would need to know statement closing date to tell you when to pay what.
This was my situation. 0% period ended 6/1/21. My statement closes on the 2nd (normally) with due date on the 28th.
So on 6/1 I paid my entire balance. 6/2 statement has no "new balance". Since this is Citi, my interpretation of their "two statement" rule is to let 7/2 close with no balance (and no purchases). Only after that happens do I think I could make a purchase without having interest start immediately.

If you paid entire balance on 06/01, there should be no interest, otherwise a portion of it would have been reflected on the statement from 06/02.