What is a grace period on a credit card?

A grace period on a credit card is a set time period during which the cardholder can make credit card payments without penalty. This applies to unpaid balances only and the grace period applies after the due date of the payment. In Florida, the grace period is at least 21 days in length and requires no additional commitment from the credit card issuer. During the grace period the cardholder accrues no interest or penalty fees, though any amounts applied to the purchase of a good or service are still subject to interest based on the terms of the account. It is important to read the terms of your credit card agreement as not every credit card issuer provides a grace period. If the cardholder is unable to make a payment on time, it is important to contact the issuer and explain why. The issuer may provide a limited extension of the grace period but the cardholder must be aware that any late payments may incur penalty fees and a higher interest rate. Grace periods are an important feature of credit cards and removing them could have a significant impact on consumer debt levels. Credit card providers must adhere to the Florida credit card law and provide a grace period of at least 21 days.

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