Unit 4: Lesson 1 Credit Card Costs

How it works

• Billing cycle ends: The credit card company closes your billing cycle and generates a statement with your total balance for that period.

• Grace period begins: The grace period starts after the billing cycle ends.

• Payment due date: The grace period ends on the payment due date, which is at least 21 days after the billing cycle closes.

• Paying in full: To keep your grace period and avoid interest, you must pay the full statement balance by the due date. 

A credit card grace period is the time between the end of a billing cycle and the payment due date, during which you can pay your balance in full without being charged interest on new purchases. To benefit from it, you must pay the entire statement balance by the due date, which is typically at least 21 days after the billing cycle ends. Grace periods generally do not apply to cash advances or balance transfers, which accrue interest immediately. 

​What is it?

A credit card statement is a summary of your account's activity for a billing cycle, detailing transactions, payments, and credits, and providing information like the new balance, minimum payment due, and due date. Key sections include account information (like your name and billing dates), an account summary (previous balance, payments, new balance, credit limit), transaction history (purchases, cash advances, fees), and payment details.

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Credit Card Statment

New Balance =

Purchases and fees + finance charge + previous balance

= ___________ (a)



_______ (a) -- ________ (payments and credits) =


______________