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Grace Period
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Grace Period

The amount of time after a payment due date when no interest is charged. Grace periods of 20 to 30 days are common with many credit card issuers. Credit card grace periods only apply if a cardholder’s previous month's balance was paid in full. Grace periods do not generally apply to cash advances.

More On Grace Period

The amount of time after a payment due date when no interest is charged. Grace periods of 20 to 30 days are common with many credit card issuers. Credit card grace periods only apply if a cardholder’s previous month's balance was paid in full. Grace periods do not generally apply to cash advances.

The grace period is not the amount of time consumers have to pay their credit card balances. That date is the one printed on the monthly statement. Grace periods for credit cards refer to the amount of time after the payment is due before the creditor charges interest on new purchases. Grace periods only apply to cardholders who do not carry a balance.

The fine print of a credit card agreement provides details about the card’s grace period and how it is applied. Borrowers should not automatically assume that there is a grace period; not all card issuers offer it.

Grace periods can save cardholders money if their payment arrives after the payment due date.  It’s important for cardholders to understand how a grace period is applied in order to take advantage of its potential savings. However, the best way to deal with grace periods is not to rely on them, and instead to set up a reliable method for paying the card’s balance on time and in full each month.