Grace period

How it works

Card issuers are not required to offer a grace period, though most cards provide one on purchases. The law does set a timing rule: issuers must have procedures so your bill is mailed or delivered at least 21 days before the payment is due. That stretch is your window to pay the statement balance in full and avoid interest on the purchases it includes, under your card’s terms.

If you do not pay the full balance by the due date, interest is generally charged on the unpaid portion, and new purchases can start accruing interest from the date each one is made. Paying in full in some months but not others may cost you the grace period for the month you fell short and the month after. Your agreement states how many on-time, paid-in-full billing periods it takes to get it back.

The grace period most cards offer applies to purchases. A cash advance, or a check your card issuer sends you to use, generally starts accruing interest on the date of the transaction. Balance transfers and promotional balances follow the terms written for them, so the agreement for each balance type is the place to check.

Related terms

Sources and further reading

• CFPB: Credit card grace periods
• CFPB: Credit card contract definitions

Examples are illustrative and focus on U.S. personal finance. This page is educational, not individual financial, investment, tax, or legal advice. Read our editorial approach or report a correction.