A rewards rate should not be evaluated separately from interest. The Consumer Financial Protection Bureau explains that a grace period is the time between the end of a billing cycle and the payment due date. Many cards let you avoid interest on purchases when you are not carrying a balance and pay the full balance by the due date, but issuers are not required to provide a grace period.
Carrying a balance can change the calculation
If you lose the grace period, interest may apply to an unpaid balance and to new purchases from each purchase date. That cost can exceed rewards quickly.
Cash advances are different
Grace periods commonly apply to purchases, not cash advances. Read the issuer agreement before using a transaction that could be treated as a cash advance.
Use tools conservatively
Our calculators estimate rewards and fees; they do not treat borrowing costs as a strategy. Use the True Break-Even Calculator and Annual Fee Calculator, then compare the result with your actual card agreement.
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