Grace Period

Grace Period is a configurable period during which finance charges for credit cards are not assessed, assuming the full previous balance is paid by the due date.

• For information about the unique configuration features for CU*BASE online credit card loans, refer to the Online Credit Card Processing Configuration Guide.

If a grace period is used, periodic finance charges will not be assessed for new purchases if the full amount of the New Balance is posted by the payment due date and the Previous Balance on the credit card account was zero or was a credit balance.

• Although many credit card programs do not offer a grace period for cash advances or balance transfers, CU*BASE lets you specify which charge types use a grace period and which do not.

Members quality for a grace period for purchases made in a selected month if they have paid in full the purchase balance of purchases made for the previous payment cycle. Otherwise, they do not qualify. For example, if a member does not pay the purchase balance for the May billing cycle in full by June 25^th, the member is not eligible for the grace period with respect to purchases made during the June billing cycle, regardless of whether the consumer pays the purchase balance of the June billing cycle in full by July 25^th.

Here is an example using just one Charge Type for simplicity:

 

MAY:

May 28^th  Paid prior April loan balance by May due date.

May 29^th  Purchase of $100.00    

Balance = $100.00

May 31  Ending balance = $100.00

 

JUNE:

Jun 1   Balance = $100.00

Jun 2  Purchase of $200.00    

Balance = $300.00

June 28^th  Paid the full $100.00 May lending loan balance

June 30  Ending balance = $200.00

Because the member paid full April statement balance by May 28^th due date, grace will apply to the 200 purchases in June.

No Finance Charge as the Purchase on June 2 is a current cycle purchase – Grace applies.

 

JULY:

July 1   Beginning balance = $200.00

July 28  Payment of $100   

Balance = $100.00

July 31  Balance = $100.00

Finance Charges are calculated going back to July 1 based on a recalculated accumulated daily balance of $100.00 through July 31.

 

AUGUST:

The Grace Period does not apply until the full loan balance is paid in full by the current billing cycle due date. Finance charge for August will calculate as normal.