What Is a Grace Period on a Credit Card?
5 Min Read | Published: June 19, 2024
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
A credit card grace period is the amount of time between your statement closing date and payment due date. It’s typically at least 21 days, but it will vary.
At-A-Glance
- A credit card grace period is the period of time between the end of a billing cycle and the payment due date.
- Most credit card issuers have a grace period of at least 21 days, but this will vary, depending on the issuer.
- Paying your entire credit card balance during the grace period can help you avoid interest charges on most purchases.
A grace period is the amount of time between the end of the billing cycle and your payment due date. Understanding how grace periods work can help you to manage your credit card payments and avoid certain types of interest. In this article, we’ll explore how grace periods work and their significance for credit cardholders.
What Is a Grace Period on a Credit Card?
Put simply, a grace period on a credit card is the amount of time during which your credit card won’t accrue interest on the money you’ve borrowed. If you pay your credit card balance in full during the grace period or before your due date, you can save on interest.1
Let’s say you spent $1,000 during your credit card’s billing cycle that closed on June 1, and your due date is June 21. As long as you repay the entire $1,000 balance at some point within those 21 days, you won’t have to pay interest on the purchases that you made during this time. Note that interest, however, may still apply for certain transactions such as cash advances and balance transfers.
How Long Is a Typical Credit Card Grace Period?
Credit card issuers are not obligated to provide a grace period.2 And some credit cards may not extend one. However, credit card issuers must send you your credit card bill within 21 days of the due date. And if they do offer a grace period, it must be at least 21 days long.3
How Does a Credit Card Grace Period Work?
In most cases, credit cards have monthly billing cycles. To understand a credit card grace period, you’ll need to pay attention to these two dates:4
- Statement closing date. The statement closing date refers to the period of time when your billing cycle ends and a new statement period begins. This is when your credit issuer will generate a statement that outlines all of the purchases you’ve made and the amount you owe.
- Payment due date. The payment due date is often at least 21 days from the statement closing date. If you repay your credit card balance in full by the due date, you can reduce (or even eliminate) interest charges.
What Happens If You Don’t Pay Off Your Balance?
Ideally, you’d pay your full credit card balance by your due date. If you don’t, however, you can expect your credit card company to revoke your grace period. Then, they’ll begin to charge you interest on your balance plus any new purchases you make. In this case, there won’t be a grace period for billing cycles in the future, at least not until you’ve caught up on your payments.5
When Does the Grace Period Not Apply?
If your credit card has a grace period, you’ll be able to avoid interest on most purchases you’ve made by paying your balance on or before the due date each month. However, it’s important to note that certain transactions, including cash advances and balance transfers, don’t usually have a grace period. Instead, you’ll owe interest as soon as you make the transaction.6
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Frequently Asked Questions
To determine if your credit card has a grace period, look at your cardholder agreement. This information will likely be in the “interest rates and/or interest charges” section, or a similar place. You can always reach out to your credit card issuer if you can’t find it.7
Typically, it’s not possible to extend the grace period on your credit. However, you can time your purchases to extend the period that you won’t be charged interest. You can do this by making a purchase right after your statement’s closing date.8
If you pay off your balance during the grace period, you shouldn’t have to worry about any negative impact to your credit score. In fact, your score may improve if you use your grace period to help you pay your bills on time.9 However, making payments late can negatively impact your credit.
The Takeaway
Grace periods vary, and not all credit cards offer them. However, you typically have at least 21 days between the end of your billing cycle or statement closing date and your payment due date to pay your credit card bill.
1,4 “Credit Card Grace Period: What It Is And How It Works,” Forbes
2 “What is a grace period for a credit card?,” Consumer Financial Protection Bureau
3 “What Is the Credit CARD Act of 2009?,” Experian
5,6,7,8 “Credit Card Grace Period: What It Is And How It Works,” Time
9 “Credit Card Grace Periods: What They Are And How To Use Yours To Curb Interest,” Rocket Money
Anna Baluch is a personal finance writer from Cleveland, OH. She enjoys helping people from all walks of life make smart financial decisions. Her work can be seen on Credit Karma, Forbes, LendingTree, Insurify, and many other publications. Connect with Anna on LinkedIn.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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The material made available for you on this website, Credit Intel, is for informational purposes only and intended for U.S. residents and is not intended to provide legal, tax or financial advice. If you have questions, please consult your own professional legal, tax and financial advisors.
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