What is a credit card grace period?

About payment grace periods

When you make a purchase using your credit card, you delay the period of time until you actually need to shell out cash for the item you purchased. Most credit cards have a grace period that allows you to delay paying interest on your balance. This grace period is usually around 28 days or longer, but each credit card company decides how long their grace periods will be.

When you surpass that grace period without having paid off your balance, the interest begins accruing on your account. This is when the credit card can really start costing you money.

When possible, it is often beneficial to pay off your entire balance prior to the end of the grace period. If you are able to do this consistently, then you essentially wind up using the credit card as an interest-free loan. When you do not pay off the entire balance, however, you begin compounding interest charges.

Be sure you take the time to read the accompanying information with your credit card so you actually know how long your grace period is.