How Do Credit Cards Really Work?

Every credit card comes with a billing cycle, interest rates, and a grace period—understanding these can save you hundreds (or even thousands) in interest.

Billing Cycle: This is the period (usually 30 days) when your purchases are tracked. At the end, you receive a statement showing what you owe.

Interest Rates: If you don’t pay your full balance by the due date, you’ll be charged interest—basically, a fee for borrowing money longer. Example:
Pay in full? $0 interest.
Make minimum payments? You could owe hundreds in extra interest over time.

Grace Period: Most cards give you 21 days to pay after your statement is issued—interest-free. But if you miss that window? Interest starts adding up fast.

Bottom line: Always aim to pay in full to avoid unnecessary costs! Let’s dive deeper into how to manage your credit card wisely.