Final answer:
It is true that failing to pay your credit card balance on time may result in the suspension of the grace period, which could lead to immediate interest accrual on new purchases as well as late fees and potential damage to your credit score.
Step-by-step explanation:
The statement that if you do not pay your credit card total balance on time, your lender may choose to suspend the grace period allowed for which to pay back your charges is true. When you use a credit card, you're essentially taking out a short-term loan; the money is transferred from the credit card company to the seller, and you owe that amount back to the company. Most credit cards offer a grace period during which no interest is charged on new purchases if you pay your previous balance in full by the due date. However, if you fail to pay on time, not only can the grace period be revoked, but you may also be subject to additional fees, such as late payment charges, and your subsequent purchases could begin accruing interest immediately.
Each month you carry a balance, you will be charged interest on the amount owed. This interest is calculated by multiplying your balance by the interest rate. Additionally, if you are consistently late with payments, the credit card company may increase the interest rate, penalize you with late fees, and report you to credit bureaus, which can affect your credit score adversely.