JagInsights › Glossary › Grace period
What is a credit-card grace period?
A grace period is the window after a purchase when a credit card charges no interest if you pay the statement in full.
A grace period is the time between the end of a billing cycle and the payment due date, during which new purchases usually do not accrue interest if the previous statement was paid in full.
Worked example
The statement closes on the 12th with a $400 balance. The due date is the 8th of the next month. Pay $400 by the 8th and those purchases did not cost interest. Pay $50 and interest starts on the remaining $350, and often on new purchases too, because the grace period is gone until the card is paid in full again.
Why it matters
People treat the due date as a suggestion. The grace period is the whole reason a credit card can be free to use.
Questions people ask
Do cash advances have a grace period?
Usually no. Interest often starts the day of the advance.
Does every card have one?
Most purchase cards do. The length is in the card agreement, not a number this page can promise.
If I carry a balance, do new purchases get a grace period?
Often not, until the card is paid in full. Read the agreement.
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