Grace period
The window between when a credit card statement closes and the due date, during which purchases accrue no interest if the previous statement was paid in full.
The grace period is the interest-free window between the day a credit card statement closes and the payment due date — legally at least 21 days on cards that offer one. If the previous statement was paid in full by its due date, purchases in the current cycle accrue no interest at all.
Kept up month after month, this is essentially a permanent short-term loan at zero cost — the whole reason to use a credit card for spending rather than a debit card, aside from card perks and fraud protection.
How it is lost: paying anything less than the statement balance in full. The grace period is a condition, not a permanent feature. Missing it by even a few dollars means the leftover accrues interest and new purchases start accruing from day one. Cash advances and most balance transfers do not have grace periods either. Paying in full restores it, usually within one or two cycles.
Plumb is financial education, not financial, investment, tax, or legal advice.