The Grace Period

It sounds like such a nice thing - a grace period. That is the term for the number of days that you have to pay for a credit card purchase without a finance charge being assessed to you. 

The grace period usually runs from the credit card’s statement date, the day on which it is prepared, and ends on the credit card’s payment due date. If you have paid last month’s bill in full on time, and you are carrying over no balance, then you will not be charged any finance charges during this period of time. However, if you are carrying over a balance from the previous month, then the grace period often disappears, and interest will appear on new purchases immediately.

The length of the grace period plays a significant role in the amount of interest that you will pay. The grace period traditionally lasts about 25 days. But the grace period can be shorter, such as a 20 day period, and credit card companies have recently been shortening them. A shorter grace period shrinks the amount of time that you have to send in your credit card bill, thereby potentially increasing the fees and interest charges that are assessed to your account.

The grace period can be called different things, but you should simply know it as an important factor in determining the amount that you owe to a credit card company.