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What is Grace Period?

The time after your credit card bill is due where you can pay without penalties.

What is a Grace Period (Credit Card)?

This is a set amount of time after your bill's due date where you can still pay without any penalties. It's kind of like extra time given to you to pay off your bill. [1]

For example, if your credit card bill is due on the 1st of the month and you have a 15-day grace period, you could technically pay the bill by the 16th of that month without facing any late fees. However, not all bills come with grace periods, and the length can vary, so it's important to check with your lender or service provider to be sure.

Remember, regularly paying your bills on time, even within your grace period, can help improve your credit score.

3 things to know about Grace Period

1. Varies by Credit Card: Did you know that the length of a grace period can vary depending on the credit card? The Credit CARD Act of 2009 requires that if issuers do provide a grace period, it must be at least 21 days. But some credit cards offer longer grace periods, giving cardholders more time to pay off their balance without accruing interest. [2]

2. Interest Charges: If you don't pay off your balance in full before the end of the grace period, you'll start accruing interest on your remaining balance. That means you'll owe more than initially charged. However, if you pay off your entire balance within the grace period, you generally won't be charged any interest.

3. Not For All Transactions: Grace periods typically apply to purchases, but not necessarily to other types of transactions. For example, cash advances and balance transfers usually start accruing interest immediately. Be sure to check your card's policy for different types of transactions.

What is the Credit Card Act of 2009?

The Credit Card Act of 2009 is a federal law designed to protect credit card users by making credit card companies more transparent in how they do business. To view a more detailed definition, you can visit the Credit Card Act of 2009 glossary page.

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Disclaimer: Yendo is not a provider of financial advice. The material presented on this page constitutes general consumer information and should not be regarded as legal, financial, or regulatory guidance. While this content may contain references to third-party resources or materials, Yendo does not guarantee the accuracy or endorse these external sources.