In general, do credit card issuers charge interest on transactions made during the grace period?

1 Answer 1


This depends on your credit agreement.

In the United States, for the majority of major, average-plus-credit-score credit cards, if you paid your balance in full for the previous month's bill, and often some other criteria (such as not having any late payments recently), and you are making a purchase and not a cash advance, balance transfer, or certain classes of transactions that are treated as cash advances (such as paying at a casino), then you are not charged interest in transactions during the grace period.

If you:

  • Had an unpaid balance, even $0.01, after your previous billing cycle. Note this is really two months ago - since your grace period more-or-less corresponds to your current bill payment period (both are typically around three to four weeks).
  • Sometimes, had an unpaid balance on any of the last two billing cycles
  • Had a late payment in the recent past (often 6 months)
  • Have a card, including many "poor credit" cards, that does not have an interest-free grace period
  • Are in another country other than the US, some of which do not always or often have interest free periods

Then you may owe interest from the day the charge clears your card (usually 1 to 3 days after you actually swipe the card, but not always).

See this NOLO article for some excellent detail on the subject and what to look out for.

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