What It Means
A grace period is the window of time - typically 21 to 25 days - between when your credit card billing cycle ends and when your payment is due. During this period, you are not charged interest on new purchases, provided you paid your previous balance in full. The grace period is what makes credit cards a powerful financial tool: it essentially gives you a free short-term loan. However, if you carry a balance from month to month, most cards eliminate the grace period on new purchases, meaning interest accrues immediately. Cash advances and balance transfers typically do not have grace periods.
Frequently Asked Questions
How long is a typical credit card grace period?
Most credit cards offer a grace period of 21 to 25 days. Federal law requires a minimum of 21 days if a grace period is offered.
Do all credit cards have grace periods?
Not all, but most do. Cards without grace periods charge interest from the date of purchase. Always check your cardholder agreement.