The grace period: How many days you have to pay your credit card bill in full before you're charged a lot of interest.

• Credit card companies have different grace periods. Some give you 21 days to pay your bill in full. Some give you 25.
• You don't get a free loan if you don't pay your bill in full before the grace period ends.

And guess what: Credit card companies don't want you to pay off your credit card before the grace period ends.

Hey, you would be that way, too, if you owned a credit card company.

Why? They want to charge you interest!

• Credit card companies need interest like you need air. They can't live without it!
• All the companies would go broke if all their customers paid off their bills each month.

That's why credit card companies can be very tricky about their grace periods.

Whatever they say, they don't want you to pay during the grace period.

Look how tricky this can be:

Can you find the grace period on the following credit card statement? (Click the image for an enlargement (.pdf))

Could you find the grace period on that statement?

Was that confusing, or what?

Were you able to figure out the grace period in our example?

We think the grace period on this statement is a total of 21 days. But we're not even sure...

Being very smart, you already see where we are going with this, right?

• Don't delay paying your credit card bill.
• Pay your credit card bill the day it comes.
• Pay your credit card bill the day it comes, whether you're paying all the bill or part of the bill.