How to use the credit card interest-free period correctly: detailed instructions

How does a credit card differ from a loan

A credit card allows you to pay for goods and services with bank money. In principle, the card is similar to a consumer loan, but there are several important differences. For example, the credit card limit is renewed. As the cardholder pays off the debt, he can again use the money. The bank issues a consumer loan once. And if, after paying off the debt, money is needed again, you will have to re-apply and wait for its approval.

Interest on a loan is accrued from the moment of its issuance for the entire amount at once, even if the borrower did not have time to spend it. The bank calculates the interest on the card for the amount of cash withdrawal or payment for the purchase and only if the client does not meet the interest-free period to repay the debt.

It is convenient to use a credit card for daily purchases - it can be used to pay in stores and pay for other household needs. And a loan will help out if you need a large sum one-time - for example, you decided to update the appliances in the kitchen and calculated exactly how much money you have to spend.

What is interest-free period

Another important difference between a credit card and a consumer loan is that you will be able to use the card free of charge, if the bank provides an interest-free period (it is also called a grace period, or grace period). This is the time during which the borrower can return the money spent, and the bank will not charge interest on the debt. The interest-free period can last from several weeks to several months, depending on the conditions of the bank.

How the grace period is calculated

For the interest-free period to work, you need to know the rules for calculating it. There are several options.

The bank sets a grace period separately for each operation

You need to pay off the debt in the same sequence in which the client made purchases. This option may be suitable for those who rarely use a credit card. For example, on October 1, you bought a refrigerator for 40 thousand rubles, and on October 10, you spent another 5 thousand on a microwave. If the grace period for the card is 30 days, then the debt for the refrigerator will have to be repaid until October 30, and for the microwave - until November 8.

The bank generates a statement based on the results of the billing period

Typically, this period lasts 30 days. During this time, the client uses a credit card, and at the end of the billing period, the bank sends a statement with the amount of debt by e-mail or SMS. The client has time (for example, 20 days) to return the money without interest.

Let's say your billing period starts on the first of every month. On October 1, you spent 40 thousand rubles on a refrigerator, and on the 10th you paid another 5 thousand for a microwave. At the end of the month, the bank fixed the total amount of the debt (45 thousand rubles) and sent you an extract. In order not to pay interest, you need to pay off the debt in 20 days - before November 20.

It turns out that the maximum period during which you can not pay interest is 50 days. There are banks that have a longer grace period - for example, up to 120 days. A card with a long interest-free period may be more profitable - it is more comfortable to gradually pay off the debt than to return the entire required amount the next month.

The bank starts counting the grace period from the moment of the first purchase

So, if the client first used the credit card on October 1, with an interest-free period of 50 days, he needs to pay off the debt by November 19 inclusive. If on November 9 he made a second purchase without returning the money spent earlier, then the grace period for it will last only 10 days. And then the bank will begin to charge interest.

A new billing period starts on the first day of each month

For example, a customer made a purchase and paid by card on October 4th. With an interest-free period of 60 days, he will have 26 days before the end of the current month and another 34 days after to return the money to the bank. In this case, it may not matter whether the client has paid off the previous debt in full: interest-free periods for the return of the value of purchases made in different months will be calculated separately. The October debt will need to be repaid earlier than the amount spent in November.

What the grace period covers

As a rule, the grace period is valid for non-cash card transactions. If you withdraw money or transfer it to another account, the bank calculates interest on this amount immediately. Sometimes the interest-free period does not apply to specific online transactions - for example, wire transfers to e-wallets, payments for online games or the purchase of lotteries. Check the terms and conditions with your bank before concluding the contract, so as not to get into an unforeseen situation.

How to use a credit card and not pay interest

Make payments on time

Try to pay off the debt before the end of the grace period. If you cannot return the entire borrowed amount on time, you need to make a minimum mandatory payment in order to avoid delays and not spoil your credit history. As a rule, it is a few percent of the debt amount - this is how the bank understands that the client is solvent. This is not an additional fee, but the repayment of part of the debt. If the client has made a delay, then the amount that had to be paid in the previous billing period will be added to the obligatory payment of the current month.

Make large purchases at the beginning of the reporting period

If the grace period on your credit card is not calculated separately for each operation, but is valid from a certain day of the month, plan large purchases at its beginning. Let's say your reporting period is from October 1st to October 31st. At the end of the month, the bank will send a statement, after which you will have another 20 days to repay the debt. It is more profitable to make a large purchase on October 1 - this way you can use the bank's money for longer without overpayments.

Carefully study the conditions of the bank

Each bank has a list of transactions that are not subject to the grace period. For example, a bank may restrict cash withdrawals or purchases of foreign currency. If you do not want interest accrued, such actions are best avoided. Sometimes banks do not interrupt the grace period, but they may charge a commission when withdrawing cash or transferring to a debit card.

Plan your budget

The money on the credit card is not your personal, it will have to be returned. Try to plan your purchases so that you can balance spending and income and pay off debt at a comfortable pace. Determine an acceptable monthly payment (for example, 10% of income) and try not to exceed it.

It's a good habit to check your credit report. You can understand what you could save on and which purchases you should refuse.

PJSC Sberbank. General license of the Bank of Russia for banking operations No. 1481 dated August 11, 2015.