Why is it essential to understand grace period of your credit cards?

financialexpress.com:

Credit cards serve as essential tools for handling expenses and enabling various transactions. While we often understand the basics about our credit cards, there are key insights we should grasp to leverage these tools more effectively. Among the array of features, one particularly advantageous aspect is the grace period—a designated timeframe wherein cardholders can make purchases without accruing interest charges.

Understanding and utilising the grace period effectively is paramount to make the most of your credit cards. It not only influences how you manage credit card debt, but also enhances your financial adaptability and control.

The grace period on a credit card refers to the duration between the billing date and the payment due date, during which cardholders can settle their outstanding balance without incurring any interest charges. Basically, it is a buffer period that allows you to repay your dues without penalty.

For example, your credit card billing cycle runs from the 1st of the month to the 30th. If you make a purchase on the 5th of the month, you may have until the 25th of the following month (a 20-day grace period) to pay off that purchase without incurring any interest charges. This grace period varies based on your credit card. Once your credit card bill is generated, you usually have a date on which or before which you should make the payment to avoid penalties or additional charges.

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Often the grace period ranges from 20 to 60 days, depending on the credit card and the specific terms of the card you may be using. The billing date marks the beginning of the billing cycle, during which all transactions made with the card are recorded. At