Credit-card grace time can save you money

It's hardly a secret that credit-card companies are always looking for ways to squeeze money out of customers.

That means consumers must always look for ways to hold on to their money.

Many consumers focus on interest rates, but another thing to consider is the grace period — the time you have before a card company starts charging interest on new purchases.

Some issuers have been shortening grace periods or changing grace-period rules.

The average grace period among the top 10 credit-card issuers is 22 days, according to the 2007 Credit Card Survey by Consumer Action, a nonprofit, membership-based organization that advocates for consumer rights.

That's down from 30 days several years ago, said Bill Hardekopf, chief executive of LowCards.com.

To keep your interest payments to a minimum, it's important to understand the grace period for each of your cards.

There are basically three types of grace periods, according to American Express.

With a typical grace period, you pay interest on all new purchases immediately, unless you have paid your previous month's bill in full.

A card with a full grace period means the average daily interest calculation doesn't include new purchases made that month.

And a card with no grace period means interest is charged on all purchases immediately.