What is a grace period on a credit card?

A grace period on a credit card is a set period of time that cardholders have to pay their monthly credit card balance in full without incurring interest charges. In Maryland, the grace period on credit cards is at least 21 days beyond the payment due date. During this period, cardholders are allowed to make purchases without incurring an interest charge, as long as they pay their account balance in full before the end of the grace period. If cardholders do not pay their balance in full during the grace period, they will be charged a finance charge which is the interest charged on the unpaid balance. The interest rate charged on the unpaid balance is known as the annual percentage rate (APR). The APR can vary from one card to another and it is important for cardholders to understand the terms and conditions of their credit card. The grace period on credit cards is an important feature for cardholders. It allows them to use their card without having to worry about interest charges as long as they are able to make a full payment within the grace period. It is important for cardholders to understand the terms and conditions of their credit card, including the grace period and associated finance charges, in order to make the most efficient use of a credit card.

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