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Interest and the grace period
Using credit without getting trapped · Lesson 19 of 22 · 3 min
If you pay your statement balance in full each month, purchases cost you nothing in interest. That window is the grace period, and it is the only free credit that exists.
Carry a balance once and many cards suspend the grace period, charging interest on new purchases from the day you make them until you are back at zero.
Cash advances never have a grace period. Interest starts immediately, usually at a higher rate, plus a fee.
Takeaway
Pay the full statement balance and credit is free. Cash advances never are.
Next up: Why minimum payments never end