Credit Card Interest Free Balance - The Grace Period

A credit card interest free balance transfer usually has a grace period of 6 to 12 months. During this grace period, a card holder has the ability to make new purchased at a 0 percent or low interest rate. Balance transfers are typically assessed a fee of 2 to 3 percent, depending on the company.

Interest Rates

Lower rates are an important marketing tool for credit card companies that are seeking to attract new customers. The lower rates bring many new customers to card companies. Lower rates are part of transfer promotions or meant to attract new clientele and benefit both the consumer and the card company.

The Grace Period

The interest free balance grace period typically applies to the amount that is transferred from another card. All terms and conditions for grace periods should be explained in the credit card agreement or application. The information provided should be detailed and specific and explain how it works and the responsibilities of all parties engaged in the credit card account.  

Grace Period Benefits

The grace period benefits card users because card companies waive interest charges and other penalty fees that may be associated with a late payment. The downside, however, is that once the customer begins paying interest on their purchases made, late payments may entitle the credit card company to increase the interest rates of the card. Also, they can retroactively charge interest that was not assessed during the grace period.

Where to Find Grace Period Terms

Any terms and conditions specifying the grace should be spelled out in the credit card agreement and be read carefully by the card holder. A credit card holder should also ask questions or seek a clarification of any terms that appear to be vague or confusing. A credit card issuer is required to provide clear and concise information about grace periods.

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