Credit Card Grace Periods Explained [Chase, Amex, Citi, Capital One & More]

Key Takeaways

• A grace period is the time between the end of a billing cycle and the payment due date when no interest is charged if the full balance is paid off.
• Most credit cards offer a grace period of 21 to 25 days, which is regulated by the Credit Card Accountability Responsibility and Disclosure Act (CARD Act).
• Carrying a balance from one month to the next typically voids the grace period, leading to interest charges on new purchases and your remaining balance.

One thing we try to reinforce here at Upgraded Points is that if you pay the full statement balance on your credit card bills each month, you won’t ever have to pay interest! If you are a responsible credit cardholder, credit card companies basically give you an interest-free loan — which means you have all of the perks and ease of using a credit card at no additional cost to you.

But how exactly does this work? Well, it’s all due to something called a grace period. In this article, we’ll help you understand how a grace period works and give you tips on how to make the most of it. You’ll also learn how to remain eligible for your grace period, which could help you avoid hundreds of dollars in interest charges.

What Is a Grace Period?

A credit card grace period is the time between the end of your card’s billing cycle and the date your payment is due. Most card issuers offer this interest-free period on purchases if you meet certain criteria — but the specific terms and conditions vary by card.

In general, grace periods last between 21 and 25 days after you receive your credit card bill or statement. This is regulated by the Credit Card Accountability Responsibility and Disclosure Act (CARD Act). This Act doesn’t require credit cards to have grace periods, but it does require the ones that do to make their grace periods at least 21 days. For cards that don’t have grace periods, the company is required to mail the bill out at least 21 days before the due date.

The CARD Act also has some rules in place regarding payment due dates. The day your bill is due usually coincides with the end of your grace period. This Act requires companies to make the payment due date the same day each month and makes it illegal for the company to alter its grace period month to month.

Hot Tip: If your payment due date falls on a day when payment isn’t accepted (like a weekend or holiday), then payments made on the next business day are not considered late. This effectively extends your grace period.

During this time between the statement date and due date, you won’t accrue interest on new purchases made during the previous billing cycle (as long as you’re not carrying a balance on your account from your last statement, but we’ll discuss this more below).

Pay Off Balance in Full

There is no single best day to pay off your credit card — as long as it is before your due date. If you are trying to make your payment on time and you are paying your bill online, be sure to submit your payment prior to your payment cutoff time. If you are sending in a payment by mail, make sure to factor in some extra time for mailing and processing.

Here’s a simple example of how a credit card grace period works if you pay your card off in full each month on or before your due date:

• Your account starts with a $0 balance
• You make a purchase for $200 on January 1
• Your billing cycle closes on January 15
• Your payment is due on February 5

If you pay off your whole bill by February 5, you won’t owe any interest on this $200 purchase. You’ve essentially received an interest-free loan for these 35 days.

Bottom Line: You must pay the full statement balance each month to keep your grace period active for future transactions.

Make Partial Payments (Carrying a Balance)

Even if your card does have a grace period, it will likely be removed if you start carrying a balance from month to month.

Let’s take the same example as above, but change your payment slightly:

• Your account starts with a $0 balance
• You make a purchase for $200 on January 1
• Your billing cycle closes on January 15
• Your payment is due on February 5 and you make a $180 payment, leaving $20 remaining

While you won’t get hit with any fees for late payment, you WILL lose your grace period. Losing your grace period means that you’ll start immediately accruing daily interest on any new purchases as well as owning interest on the remaining unpaid $20. The exact cost for this will vary based on your card’s APR, but you should know that these costs are entirely avoidable.

Depending on your card, you can regain access to your grace period by paying off your credit card statement balance in full for 1 to 2 consecutive billing cycles.

Hot Tip: Grace periods do not apply to cash advances or convenience checks as these both start accruing interest immediately and usually at a higher interest rate than normal purchases (unless part of a 0% promotional offer). Some cards may also exclude balance transfers from the grace period, so check the terms of your card.

Not Making Minimum Payments

If you don’t pay off at least the minimum balance on your card, miss your due date by 1 day, or completely miss a payment, you’ll be charged a late fee AND lose your grace period. You’ll also be charged interest fees on any remaining balance on your card. It’s easy to see how interest and other fees add up quickly!

Do All Credit Cards Have Grace Periods?

While the majority of credit cards do offer grace periods, not all cards offer one. You should read the terms and conditions in your credit card agreement to confirm.

The details of how a grace period works for a specific card can be found on the credit card agreement. When looking through the agreement, look out for sections like “When We Charge Interest,” “Grace Periods,” or “Paying Interest” to find out how and when you can avoid interest for your specific card.

Even if your card has a grace period, it is possible to lose your grace period. As we noted above, if you don’t pay off your statement balance in full, you can lose your grace period until you make 1 to 2 consecutive payments for the full statement balance.

Hot Tip: If you can’t locate your credit card agreement, the Consumer Financial Protection Bureau keeps a library of all past agreements for reference.

How To Take Advantage of Your Grace Period

If you’re aware of your credit card’s grace period, you can use it to your advantage. For example, if you’re planning on making a big purchase like new furniture or a big trip, we’d recommend waiting until right after your statement’s previous closing date to make the purchase.

By planning your purchases according to statement cycle dates, you can take maximum advantage of your credit card’s grace period to make a purchase without paying interest on it (also known as “floating”).

For example, let’s say you have:

• A cycle start date of September 27
• A cycle end date of October 26
• A payment due date of November 23

By making a purchase on September 28, your bill wouldn’t be due until November 23. That’s nearly 2 months of an interest-free loan!

Bottom Line: If you have specific questions about your situation and due dates, we recommend checking with your card issuer directly.

Can I Extend My Grace Period by Changing My Due Date?

While you’re welcome to change your bill’s due date with most issuers to make it more convenient, it won’t affect the current cycle’s grace period. In addition, due date changes usually take at least 1 to 3 billing cycles to go into effect for most cards.

In general, this means that changing your due date won’t help you extend your grace period in the short term.

Grace Periods by Card Issuer

Each bank handles grace periods slightly differently, so it’s important to be familiar with each bank’s policies regarding grace periods. In addition to differences by bank, each card may also have slightly different grace periods, so you should always check your credit card’s agreement for the exact grace period.

American Express

Minimum Length of Grace Period: 25 days
When It Applies: You must have paid your balance in full for the previous 2 billing cycles to be eligible; applies to regular purchases
When It Doesn’t Apply: Revolving balances, cash advances, and balance transfers (excluding 0% promotions)
How Long To Reinstate a Lost Grace Period: Paying off balance for 2 consecutive pay periods

Bank of America 

Minimum Length of Grace Period: 25 days
When It Applies: You must have paid your balance in full for the previous 2 billing cycles to be eligible; applies to regular purchases
When It Doesn’t Apply: Revolving balances, cash advances, and balance transfers (excluding 0% promotions)
How Long To Reinstate a Lost Grace Period: Paying off balance for 2 consecutive pay periods

Capital One 

Minimum Length of Grace Period: 25 days
When It Applies: You must have paid your balance in full for 2 previous billing cycles to be eligible; applies to regular purchases
When It Doesn’t Apply: Revolving balances, cash advances, and balance transfers (excluding 0% promotions)
How Long To Reinstate a Lost Grace Period: Paying off balance for 2 consecutive pay periods

Chase 

Minimum Length of Grace Period: 21 days
When It Applies: You must have paid your balance in full for 2 previous billing cycles to be eligible; applies to regular purchases
When It Doesn’t Apply: Revolving balances, cash advances, and balance transfers (excluding 0% promotions)
How Long To Reinstate a Lost Grace Period: Paying off balance for 2 consecutive pay periods

Citibank 

Minimum Length of Grace Period: 23 days
When It Applies: You must have paid your balance in full for the previous 2 billing cycles to be eligible; applies to regular purchases
When It Doesn’t Apply: Revolving balances, cash advances, and balance transfers (excluding 0% promotions)
How Long To Reinstate a Lost Grace Period: Paying off balance for 2 consecutive pay periods

Discover 

Minimum Length of Grace Period: 25 days (23 if billing cycle starts in February)
When It Applies: You must have paid your balance in full for 2 previous billing cycles to be eligible; applies to regular purchases
When It Doesn’t Apply: Revolving balances, cash advances, and balance transfers (excluding 0% promotions)
How Long To Reinstate a Lost Grace Period: Paying off balance for 2 consecutive pay periods

Wells Fargo 

Minimum Length of Grace Period: 25 days
When It Applies: You must have paid your balance in full for 1 previous billing cycle to be eligible; applies to regular purchases
When It Doesn’t Apply: Revolving balances, cash advances, and balance transfers (excluding 0% promotions)
How Long To Reinstate a Lost Grace Period: Paying off balance for 2 consecutive pay periods

Final Thoughts

Understanding grace periods is essential to having a healthy relationship with your credit cards. By knowing your billing cycle and the terms of your credit card’s grace period, you can maximize your spending power by taking advantage of short-term, interest-free loans and you can ensure that you avoid any unnecessary interest charges.