Credit card interest grace period going away??

[jsk]

Definitely, I would cancel my CC !!

[Alex_Adviser]

Not that this concerns me, we don't have any credit cards, but...... I have read on a few different forums that at least a few credit card companies are considering doing away with the grace period between the purchase and interest applying. In other words, interest on your purchase will begin at the time of purchase.

I have not been able to find anything about this on the web, although I admit that I haven't spent a great deal of time looking. Has anyone else heard of this, or is it a myth?

That is some type of a rumor that you have come across. Its common sense that if they charge interest from the time the purchases are made then no one would prefer to buy from a credit card, instead pay everything by cash. I am still having 2 credit cards, if this was the scene then i would have definitely closed them.

[disneysteve]

Its common sense that if they charge interest from the time the purchases are made then no one would prefer to buy from a credit card

Alex, millions of people already do this every day. If you have an outstanding balance on your card and continue to make new charges to the account, you are paying interest instantly. I agree that it makes no sense. That's why I pay my bill in full every month, but lots of people don't.

[boosami]

Alex, millions of people already do this every day. If you have an outstanding balance on your card and continue to make new charges to the account, you are paying interest instantly. I agree that it makes no sense. That's why I pay my bill in full every month, but lots of people don't.

Some cards are even worse than that... They use two-cycle billing. This calculates the balance you pay interest on from the previous month as well as the statement month. Basically, you pay interest on charges that you have already paid off last month. This is a tricky way for the credit card company to say they have a grace period, but the minute you carry a balance the grace period retroactively disappears. Now that's scary!

Discover is one of the companies known for two-cycle billing practices. And it's one of the reasons I do not have a Discover card. (Though, two-cycle billing does not affect you if you do not carry a balance.)

[disneysteve]

boosami is correct and two-cycle billing is one of the things banned in the new credit card rules that Congress passed.

[am_vanquish]

I'd be fine with them eliminating the grace period if they let me pay my bill any time I want, as often as I want. I have no problem with submitting CC payments every single day of the month. That way, I'd still get the rewards while minimizing the impact of continuous interest. Maybe the increased transaction costs would teach them a lesson for trying to pinch an extra dime out of me!!!

Just kidding ... maybe ...

[disneysteve]

I'd be fine with them eliminating the grace period if they let me pay my bill any time I want, as often as I want

No way. If I had to pay the bill every day to avoid charges, I'd just pay cash.