What Is a Grace Period, and How Does It Work?

When you pay your credit card balance in full during the “grace period,” you don’t have to pay any interest.

Pay all credit card bills to zero in order to avoid interest. jason cox/Shutterstock

Dear Mary: Is there a law that says how long the grace period must be? (And if you don’t mind, exactly what IS a grace period?) —Justin

Dear Justin: In the world of lending and borrowing, the “grace period” is the number of days between the time you make a credit card purchase and when you will begin to pay interest on that short-term loan.