Grace period
The window between your statement closing and payment being due, when new purchases can go interest-free.
The window between your statement closing and payment being due, when new purchases can go interest-free.
On a credit card, the grace period is the interest-free window from statement close to the payment due date - typically 21 to 25 days under federal rules for accounts that receive one. Pay the statement balance in full inside it and new purchases never accrue interest; miss it and interest backdates to the purchase dates on most cards, so a carried balance often kills the grace period for every new charge until the card is paid back down.
Cash advances and balance transfers sit outside the grace period entirely - their interest usually starts the day the money moves, often at a higher rate than purchases. The grace period is also why paying early matters less than paying the statement balance: the interest clock keys off the statement, not the calendar. Cards without a grace period, common in some subprime products, charge from day one by design.
Worked example
A $600 purchase posts, the statement closes on the 5th with the balance due on the 30th: pay $600 by the 30th and the interest is zero. Carry $100 instead and the issuer backdates interest to the purchase date - the grace period for every new swipe is gone until the balance clears.
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