Skip to main content

What is a grace period for a credit card?

A grace period is the period between the end of a billing cycle and the date your payment is due. 

During this time, you may not be charged interest as long as you pay your balance in full by the due date. Credit card companies are not required to give a grace period. However, most credit cards provide a grace period on purchases.  

If your card gives a grace period and you are not carrying a balance, then you can avoid paying interest on new purchases if you pay your balance in full by the due date. If you lose your grace period by not paying your balance in full by the due date, you will be charged interest on the unpaid portion of the balance. You will also be charged interest on purchases in the new billing cycle starting on the date each purchase is made.

Credit card companies must establish procedures to assure that their bills are mailed or delivered to you at least 21 days before the payment is due.

With credit cards, grace periods typically apply only to purchase transactions. If you use your card to get a cash advance or use a check you received from your card issuer, generally you must start paying interest as of the date of the transaction. 

Tip: To keep your grace period, make sure to pay your bill in full each month and on time. If you pay in full some months, and not in other months, you may lose your grace period for the month that you don’t pay in full and for the month after.