Credit card grace periods: What they are and how they work

The time between a credit card purchase and when interest is charged on the purchase is called the grace period.

Learn more about how credit card grace periods work, what kinds of transactions they apply to and how you may be able to avoid credit card interest charges. 

What you’ll learn:

• A grace period is a length of time when you may not be charged interest on credit card purchases.

• The grace period on a credit card generally only applies to new purchases. There usually aren’t grace periods for transactions like cash advances or balance transfers.

• Credit card grace periods typically last at least 21 days.

• You might lose your credit card’s grace period and be charged interest if you don’t pay your full balance by the due date.

A grace period is a length of time between the end of your billing cycle and your payment’s due date. During a grace period, you might not be charged interest on your credit card purchases. Many credit card issuers offer a grace period, but they aren’t required to. You can check your credit card’s terms and conditions to see if your credit card has a grace period.

If your card has a grace period, different factors might impact whether the grace period applies to a purchase, including whether you’ve paid your previous balance in full by the due date each month. If you pay less than the full balance, miss a credit card payment or pay your bill late, you may lose your grace period and be charged interest plus a late fee.

A grace period is usually at least 21 days. But it’s possible for your interest-free grace period to be even longer. If you paid your last balance in full, then your grace period may stretch from the beginning of your next billing cycle all the way up to your next due date.

A credit card grace period lets you buy something but not pay interest on it for a certain amount of time—as long as you’ve been paying your balance in full.

Say you make a purchase with your card. Then, at the end of your billing cycle, you get a statement that shows your payment due date. If you aren’t carrying a balance from your previous cycle and you pay your current balance in full on or before the due date, you can avoid triggering an interest charge on your purchase.

Here’s an example of how that might work:

• You buy a $200 vacuum cleaner with your credit card on April 1.

• Your billing cycle ends April 3, and your payment is due April 28.

• As long as you’re not carrying a balance and you pay in full on or before April 28, you won’t owe any interest on your vacuum cleaner.

If you plan ahead, you could stretch your interest-free period even longer. Say you purchase that vacuum on April 4 instead. It would be almost a whole month before the transaction shows up on your next statement.

Every credit card is different. But you typically only qualify for a grace period if you’ve been paying your full balance on time every billing cycle. If that’s the case with your card, you should remain eligible for a credit card grace period unless you start carrying a balance past your payment due date.

You might lose your credit card’s grace period if you don’t pay your full balance by the due date. Even if you pay only part of your balance, you’ll be charged interest. If you’re late paying your minimum payment, you’ll likely be charged a late fee too.

It’s important to remember that if you lose your grace period, you’ll begin to accrue interest on purchases starting on the date of the transaction.

But there’s good news: If you lose your grace period, you might be able to get it back. Usually, you just have to start paying your balance in full and on time again.

Credit card grace periods typically apply only to purchases. On other transactions, you may be charged interest right away. For example, most credit cards don’t provide a grace period on cash advances or balance transfers. You may also be charged fees for these types of transactions.

Keep in mind that a balance transfer could have a 0% APR for a limited time. But after the introductory period ends, your interest rate will usually increase.

Check your card’s terms and conditions to find out whether you have a grace period and which kinds of transactions it covers. This could be especially important if you’re considering credit card consolidation, which involves a balance transfer.

As long as you’ve paid your previous balance in full by the due date each month, the grace period for Capital One consumer credit cards includes both of the following:

• The time from purchase until the end of the billing cycle

• At least 21 days from the end of each billing cycle until the payment due date

Here are the answers to some frequently asked questions about credit card grace periods.

If you have a grace period, you can use it to give yourself some added time between when you make purchases using your credit card and when you actually have to pay for those purchases. And if you keep track of your billing cycle and pay your full balance on time every month, a grace period can help you avoid any interest charges on purchases.

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