Your Grace Period Disappears the Month You Carry a Balance

The grace period is the window between the statement closing date and the payment due date, typically 21 to 25 days. During it, new purchases accrue no interest, but only if you paid the previous statement balance in full.

What actually happens when you carry a balance

Most card agreements say the grace period applies only when there's no balance carried from the prior cycle. The moment you revolve, even a small amount, the grace period is suspended. New purchases begin accruing interest from the transaction date. Paying the next statement in full typically restores it, but some issuers require two consecutive full payments.

The practical rules

• If you can't pay in full, stop using that card for new purchases until you can. Put spending on a card you do pay in full.
• Know your statement closing date, not just the due date. The closing date is when the balance is reported and when the grace clock starts.
• If you've been revolving and want the grace period back, pay the full statement balance for two cycles in a row and confirm with the issuer.

This is the mechanism that turns a "small" balance into a card that charges interest on everything. It's in the agreement; almost nobody reads that paragraph.