What is a credit card grace period?

A grace period consists of the days between the end of your credit card’s billing cycle and the payment due date, by which you can pay off the balance without any interest or late fees. This is typically between 21 and 25 days.

Grace periods are one of the things that make putting major purchases on a credit card convenient, due to the extended window of time you’re given to make payments. But the grace period expires if the monthly balance is not paid in full by the due date.

What percentage of Americans owe some credit card debt?

According to survey data from the American Bankers Association, Americans were carrying balances of 56% on all active credit card accounts during the third-quarter of 2022. Nearly half of all cardholders responding to the same surveys said that it would take them at least one year to completely pay off their balances. Just over one-third (34%) of cardholders surveyed said they were able to pay their balances every month.

According to Lending Tree, as of late September 2023, the average U.S. credit card APR on new offers was 24.45%. Lending Tree also reported for all existing credit card accounts accruing interest it was 22.16%. This lag in increasing rates is explained by the Federal Reserve slowly raising interest rates over time and older balances that may have been at a lower APR being paid off while new, higher APR balances accumulate for consumers.

How long is a typical grace period for a credit card?

Simply stated, a grace period is the length of time you have to pay off your balance before you owe accrued interest, which can be calculated using your daily APR.

The average grace period on credit cards is between 21 and 25 days, but some special promotional grace periods can last up to 55 days when you first receive and activate your card. There is no requirement under federal law to offer grace periods to customers, however many financial institutions do provide this service. And if they do, the grace period needs to be at least 21 days.

Remember that grace periods usually do not apply to cash advances or balance transfers. So if you take a cash advance from your credit card at an ATM or in person at a bank branch, interest begins accruing the same day. Interest also starts accruing the same day a balance transfer is completed.

Can you lose your credit card grace period?

It’s important to familiarize yourself with the rules governing grace periods. For example, missing your grace period payment date by even one day can result in interest charges, plus you could get a late fee. Carrying balances transferred from other cards that are not paid off before the promotional 0% APR ends on your credit card can also cause you to lose the grace period for that card.

If you have lost your grace period due to a one-off payment that was late by a day, this doesn’t have to be a permanent state—paying off your balance on time and in full can in many cases restore the grace period. Check your credit card’s terms and conditions for details.

Does every credit card come with a grace period?

Federal regulations require credit card issuers to mail paper statements or offer access to electronic statements at least 21 days before the minimum due date. Nonetheless, even if you pay off your balance in full before the payment date, you may still be required to pay interest. Check your card terms and conditions and look for the paragraphs prominently featured in your billing statement where it says interest charges or APR.

Options for paying down debt when no grace period is available

If your card doesn’t come with a grace period, and you find yourself unable to pay off the balance in full on your card each month, consider paying more than the minimum amount each month, and adopting other measures such as:

• Limiting or halting further purchases using that card
• Creating a budget to pay down the card debt
• Setting up automatic payments to ensure bills are paid on time

What are the grace periods on Chase credit cards?

The grace period on Chase credit cards may vary but it is at least 21 days from the end of the monthly billing cycle until your due date. Note: some Chase business credit cards may have a slightly shorter grace period of 20 days.

Chase will reinstate a grace period if you pay your balance in full for two consecutive billing cycles.

Chase offers balance transfers for select cardmembers with good credit up to 18 months—these can be useful for paying off higher interest balances on non-Chase credit cards or for important life event purchases, such as furniture for a new baby’s room or a honeymoon. One of the best ways to enhance your eligibility for credit cards with lower APR and more perks is to raise your credit score. Chase Credit Journey^® is a free online tool that allows you to check your score for free; it’s also a great resource that provides a full credit dashboard and helpful tips on how to improve your score.

In conclusion

Grace periods are a valuable part of responsible credit card use, helping cardholders make their payments on time and avoid late fees. Knowing your card’s grace period and APR is the first step toward reducing the interest paid to use it.