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Understanding Interest

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Established Member

Understanding Interest

Hello! I am fairly new to credit and have some questions regarding interest. When do interest charges start applying to credit card purchases? Do charges accumulate interest as soon as they are made, do they start accumulating interest after a statement, or is there a grace period between statements when a payment is due that you would not be required to pay interest? Thanks for your help!

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Community Leader
Mega Contributor

Re: Understanding Interest

It depends on the card. Most will give you a grace period. Whether you have one or not will be listed in your terms and conditions as well as the length. Things like a cash advance will usually begin to accumulate interest immediately regardless of grace period.







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Frequent Contributor

Re: Understanding Interest


@walkietalkie wrote:

Hello! I am fairly new to credit and have some questions regarding interest. When do interest charges start applying to credit card purchases? Do charges accumulate interest as soon as they are made, do they start accumulating interest after a statement, or is there a grace period between statements when a payment is due that you would not be required to pay interest? Thanks for your help!


If those are the cards you have (that are listed in your signature) they all have grace periods.

 

You need to check each individual terms and agreements to see specific grace periods for each one.

 

If you are a PIF (Pay in full) type person you will not incur any interest at all if done by the closing date.

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