Question

Which best describes a grace period? select the correct answer below:

O the amount of time given to pay any balance in full before interest is applied to the credit card balance.
O the minimum payment to be made for a billing cycle on a credit card.
O the length of time for each bill payment on a credit card.
O an incentive program to encourage credit card usage.

Answer 1

A grace period is the time offered by credit card companies to pay off the balance before interest is charged. It's not the minimum payment requirement or any other credit card fee structure.

Step-by-step explanation:

A grace period best describes the amount of time given to pay any balance in full before interest is applied to the credit card balance. This period allows borrowers to avoid additional interest charges if they pay off their balance within this timeframe. On the contrary, the minimum payment is the least amount you can pay in a billing cycle to keep the account in good standing, and it does not prevent interest from accruing on the remaining balance.