Can I avoid a finance charge on some forms of credit?
Yes. Many credit cards enable you to pay the entire outstanding credit
amount within a certain time period without incurring any finance
charge. By paying off your credit balance within the grace period
(which must be at least two weeks from the receipt of the bill), you
receive what amounts to an interest-free loan. The creditor still makes
money by charging the seller (such as a department store or other
retailer) a fee to process their credit card transactions, so the
lenders collect from the retailer an amount that covers their cost of
these short term loans.The credit card company may also charge you an
annual fee.
Cards such as American Express and Diners Club expect you to pay off the balance each month and usually have no finance charges.