Simple approach, awesome benefits.

What do you love about using your credit cards? Many individuals often prefer to use their credit cards to their advantage by deferring payment on their expenses. This enables them to control the overall inflow and outflow of cash in and out of their accounts. When you efficiently manage the use of the monthly billing cycle along with the grace period, one can have even more time to pay the balance before interest accrues. 

Recall that the grace period is the time that starts from your closing date in the billing cycle to the due date on your credit card statement.  

By making a purchase at the beginning of your statement period and then adding on the grace period, you can often extend payment for nearly two months without incurring interest on the purchase. It’s all about the timing.  

Taking the right approach, you can find that you are enjoying the benefits of extra time to pay in full while staying in control. Here is what you need to know about the best approach for extra spending power while maintaining a good credit score. 

Be Thoughtful about Your Credit Utilization

If you think about your credit utilization from a larger perspective, you will notice that you will be more conscious about how you go about it. A grace period is helpful if you have a low balance that you can handle. The grace period can provide assistance when you have minimal balances and can help you increase your cash flow while deferring payment. 

Experts will note that it would require overall comprehensive planning to have good results in this regard. You will notice that your overall credit utilization is what contributes to the usefulness of your grace period.  The grace period only benefits you if you pay your credit cards in full each month.  

Choose the Right Credit Card Due Date

If you have the ability to choose your credit card due date, you will notice that you can have even more control. This enables you to make large purchases without having to worry about the interest charges for a longer period of time. Of course, it will tremendously help with managing cash flow as well as you mitigate overall expenses. 

Most cannot change the due date regularly but credit card issuers will let you update it every now and then. You can find out how many times you can change the due date by looking at the terms and conditions of your credit card company. 

Try to coincide your credit card due date with the direct deposit of your paycheck into your bank account to efficiently manage your monthly bill payments. As you ensure the right synergy is present here, you can organize your overall finances. Or you can stagger your due dates so that all your bills payments do not have to be made on the same date. 

Time Your Larger Purchases After the Current Monthly Statement Begins

For instance, let us say that the credit card issuer creates monthly statements on the 20th of each month. It has a due date of the 18th of the following month. If you make a large purchase on the 21st, you will not have to worry about interest for almost two months. 

The reason why this works so well is because you have made the purchase at the beginning of the cycle. You will have the entire statement billing cycle which is about a month and then the grace period of which is about 21 to 25 days in addition. What happens now is that you will owe it on the next cycle. With this kind of thinking you can see that you can have several more interest-free weeks.  It is important to maintain the perspective that a full payment when due is the best way to preserve this benefit by not paying any interest on the purchase.


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