Credit Card Grace Period

A credit card grace period is the window between the end of your billing cycle and your payment due date. The Consumer Financial Protection Bureau explains that during this time you may not be charged interest as long as you pay your balance in full by the due date. Carry a balance past the due date, and interest usually applies, and you may lose the grace period on new purchases until the balance is paid off.

Card issuers are not required to offer a grace period, but most do, and federal law regulates how it works. Under the Credit CARD Act of 2009, codified at 15 U.S.C. 1666b, card issuers must mail or deliver your statement at least 21 days before the payment due date. If the card has a grace period, the issuer cannot charge interest for failing to pay within that period if the statement was not sent at least 21 days before it ends. The law also limits "double-cycle billing," a practice where issuers charged interest on balances from earlier billing cycles that had already been paid.

Grace period rules show up in class actions when card issuers or retailers are accused of charging interest or late fees that the law or the card agreement did not allow, for example by moving due dates without notice, posting payments late, or calculating interest in a way that ignored the grace period. These cases often rely on the Truth in Lending Act, which allows statutory damages.

If you think you were charged interest improperly, compare the statement date, the due date, and the date your payment posted, and keep your statements. The CFPB accepts complaints. Our guide on how to sue a company explains your options.