by Joseph Kenny | 10/14/08

At a time when the nation's economy appears to be teetering on the brink of recession, consumers are searching for new ways to save money.

As a result, financial experts are recommending that consumers take a close look at their credit card agreements.

Of course, consumers should know exactly how much interest they're being charged each month. If the interest rate is high, they should consider transferring their balance to a balance transfer credit card or low rate credit card.

Once they have their interest under control, consumers should focus on grace periods-the time they have before the credit card issuer charges interest on new purchases.

In some cases, credit card companies are shrinking grace periods in an effort to earn more money.

The non-profit organization known as Consumer Action reports that, among the nation's top 10 credit card companies, the average grace period is 22 days. A few years ago, the grace period was some 30 days.

Consumers who want to keep their interest charges as low as possible should pay careful attention to grace periods. According to American Express, there are three separate kinds of grace periods.

With the first kind, customers pay interest on purchases almost immediately. With the second kind, known as a full grace period, the daily interest rate does not include new purchases made during the course of that particular month. The third kind is basically no grace period, where interest is charged on all goods and services immediately.

If you find yourself with no grace period or a limited grace period on a particular card, you may want to switch to a card with a more generous grace period. In addition, when applying for new credit cards, you may want to find out about grace periods in advance in order to avoid unpleasant surprises later on.