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What’s a Grace Period for a Credit Card? The Secret to Never Paying Interest

3 min read
Susan Shain By Susan Shain Nov 23, 2018 | Updated Mar 11, 2019

We’ve got a secret — a secret credit card issuers don’t want you to know about…

If you pay your bill in full each month, you won’t ever have to pay interest on purchases with most credit cards. 

That means you can get the perks and convenience of using a credit card — at no additional cost to you.

It’s all thanks to a little something called your credit card’s “grace period.”

How Does a Credit Card Grace Period Work?

A credit card grace period comes between your billing cycle’s completion and your statement’s due date.

During this time, you won’t accrue interest on purchases made during the previous billing cycle. 

Here’s how it works:

  • You purchase a $500 plane ticket on July 1.
  • Your billing cycle closes on July 15.
  • Your payment is due on August 5.

If you pay off your whole bill by August 5, you won’t owe any interest on your $500 purchase. That’s because of your credit card’s interest-free grace period, which started on July 15. You must pay the full statement balance each month to keep your grace period active for future transactions.

For a more detailed breakdown, read our guide on how paying a credit card works.

For most cards, grace periods don’t apply to cash advances or balance transfers. Because of this, and their other fees, we strongly advise against cash advances. For balance transfers, we suggest finding a card with a lengthy 0% intro APR.

Do All Credit Cards Have Grace Periods?

No. Although the majority of credit cards offer grace periods, you should read the fine print in your credit card agreement before making any assumptions.

Usually you’ll see a statement declaring the grace period in your card’s terms and conditions. Here’s what you’ll see in the terms for the Chase Sapphire Preferred® Card (Review) (as of 11/23/18):

Grace period for the Chase Sapphire Preferred Card. Image credit: Chase

Grace period for the Chase Sapphire Preferred Card (as of 11/23/18). Image credit: Chase.

Take note that even if your card does have a grace period, your credit card issuer will likely take it away if you start carrying a balance from month to month. It doesn’t matter if that balance came from purchases, balance transfers, or cash advances — you’ll lose the grace period regardless.

Remember that $500 plane ticket from earlier? Say you paid all but $20 of your bill. While you won’t incur late fees, you will prompt the issuer to eliminate your grace period.

That means you’ll owe interest on the remaining $20 — and will also start immediately accruing interest on any new purchases. (Now do you see why we’re always telling you to pay your credit card statement in full?)

Luckily, the penalty won’t last forever: You can usually regain your grace period by paying your credit card statement balance in full for two consecutive billing periods.

What Is a Typical Grace Period for a Credit Card?

Federal regulations state that, if your credit card company offers a grace period, it must be at least 21 days between the time you receive your statement and the time your bill is due.

In other words, the majority of credit cards give you at least 21 days before you start incurring finance charges.

Check your credit card’s terms and conditions for the specifics; you might have longer than you think. The Capital One grace period is 25–55 days, for example, and the grace period for Discover cards is at least 23–25 days.

Unfortunately, there’s no “late credit card payment grace period.” To avoid late payment penalties, you need to pay at least your bill’s minimum payment by the due date. But remember: If you make just the minimum, and don’t pay the statement balance in full, your issuer will eliminate your grace period. Which means you’ll start racking up interest on any new charges right away.

Does Changing a Due Date Extend the Grace Period?

Not really. While you’re welcome to change your bill’s due date with most issuers to make it more convenient, it won’t affect the current cycle’s grace period.

For most cards, due date changes usually take at least one billing cycle to go into effect — and for some issuers, like Amex and Citi, it could take as many as three billing cycles.

Translation? It won’t grant you any extra breathing room right now.

If you have specific questions about your situation and due dates, we recommend checking with your card issuer directly.

How to Get an Extra Long Grace Period

If you’re making a big purchase, one smart strategy is to do so right after your statement’s closing date.

That way, your bill won’t be due for about two months, giving you the maximum grace period to “float” your purchase without collecting interest.

Here are some sample billing cycles to illustrate this point:

Cycle Start Cycle End Due Date
9/27 10/26 11/23
10/27 11/26 12/23
11/27 12/26 1/23

As you can see, if you made a purchase on October 28, your bill wouldn’t be due until December 23 — that’s nearly two months of an interest-free loan!

Credit Cards Don’t Have to Be Expensive

So now you know the secret: Credit cards don’t have to cost a darn thing.

As long as you always pay your bill on time and in full — and as long as your card has a grace period — you’ll never owe a dime in interest on purchases. But remember that grace periods don’t apply to balance transfers and cash advances.

If you choose a card without an annual fee, you’ll get the convenient, credit-building, and interest-free mini loans of a credit card, without feeling the burden of high interest rates.

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  • Sharkya Mendez

    Hi Susan
    Your article was very informative and helpful. Moreover, I want to know few more things about the grace period. Let’s say my statement cycle ends on 15/08/2019 and grace period ends on 05/09/2019. And i paid the full amount which is 150$ just before the statement date. I had a credit balance of 350$. So i used the credit card to get some cash out worth of 100$. So in my online bank account shows 100$ balance now. So should i pay that 100$amount on 05/09/2019?

    • John Ganotis

      It really depends on the terms of your card. I recommend you contact your credit card issuer. Cash advances are usually treated differently and start accruing interest immediately, so you could contact your credit card issuer to see how the cash advance was treated and what you owe. You may also have to pay a cash advance fee.

  • robin

    What would happen if I have an into apr of 0% for 12 months and do not pay my balance in full each month. If I make a purchase and pay entire balance off over the 12 months, no late payments, and paying the minimum and all that; will I lose my grace period going forward making purchases?

    • John Ganotis

      It all depends on the terms of the card, but if you have a promotional balance with 0% introductory APR on purchases then you would not have to pay interest on those purchases until after the 0% intro APR period ends as long as you pay at least the minimum on time each month. Depending on the terms of the card, you would likely only need to pay interest on the balance that remains at the end (however some store cards do not work this way, and you’d need to pay off the full balance by the end to avoid interest). This page explains more: https://www.creditcardinsider.com/blog/no-interest-credit-cards/