A credit-card grace period is the time between the end of a billing cycle and the payment due date.
When a card offers a grace period, a cardholder may avoid interest on eligible new purchases by paying the statement balance in full by the due date. The precise length depends on the issuer’s terms and the applicable law.
Grace periods usually apply to purchases, not automatically to cash advances or balance transfers. Those transactions can begin accruing interest immediately, depending on the agreement. A cardholder who carries a balance may also lose the interest-free treatment for new purchases.
The term is sometimes confused with the statement cycle itself. A statement cycle records transactions during a defined period; the grace period is the additional time allowed for payment after that period closes.