A grace period is the time after the billing cycle ends during which you can pay your credit card balance in full without incurring interest charges. It usually lasts between 21 and 30 days, depending on the card issuer.
How It Works
If you pay your full statement balance within the grace period, you won’t pay interest on new purchases. However, if you carry a balance, you lose the grace period and interest starts accruing on new purchases immediately.
Why It Matters
- For cardholders: The grace period provides a way to use credit without paying interest if balances are managed responsibly.
- For issuers: Encourages responsible repayment while still earning interest from customers who carry balances.
Final Thoughts
Using the grace period wisely allows you to avoid interest and keep credit card borrowing free of cost. Missing payments or carrying balances eliminates this benefit, making repayment discipline essential.