- Discussion board

I am trying to understand APR.
1. If the APR is 25% (and it is fixed) and grace period 25 days I spend $100 on the first of the month, how much will I have to pay on the 26th.
2. Can I pay my bill before the grace period expires?

This all depends on your due date and time that your monthly billing cycle closes.

The cycle closing date is the date when your statement is generated. All the charges for the preceding cycle will be included.

Your due date is the date on which your payment is due. If you have paid your bill in full the previous month, you will be able to do the same this month and not be charged any assessed finance charges... as long as you pay in full by the due date.

Let's take your $100 example:

- You make the charge on the 1st.
- Let's say your cycle closes on the 25th. (You will have to look on your statement or call your issuer to find your actual closing date)
- In this example, your payment is due on the 20th of the following month. (Your statement will have your actual due date on it)

The grace period represents the time between your cycle closing date and the due date.

If you pay your $100 off by the due date, you will not have to pay any finance charges in this example.

So, if you time your purchases just right, you can enjoy almost 2 months of interest free use!

The_Insider