In order to avoid being charged interest on a credit card balance, the grace period gives the cardholder a certain amount of time to pay off the outstanding balance.
Credit cards’ grace periods can vary from 20 to 55 days, depending on the card type and the issuing bank. In some cases, coverage can be reinstated if certain criteria are met.
If a cardholder is late making a balance, finance charges are often applied, and the grace period is not considered.
There is typically no grace period for finance charges to accrue on credit cards if a balance remains from the prior billing cycle or statement.
While most credit card cards apply finance charges to both the previous and new balances, there are a few that simply charge interest on the original balance.