How does paying off the balance monthly help a credit card user avoid finance charges? (Site 1)

By paying your balance in full every month, your credit card will not issue a finance charge to your account. A grace period lets you avoid finance charges if you pay your balance in full before the due date. The grace period is typically between 21 to 25 days. You can find it on the front or back of your billing statement. Without a grace period, the card issuer may impose a finance charge from the date you use your card or the date each transaction is posted to your account. In addition, if you only pay part of your balance, then your next billing statement will have a finance charge based on the unpaid balance and any new purchases you make.