What is the Grace Period on a Visa Credit Card: Do you know

The grace period refers to the number of days from your credit card’s statement date to the due payment data which does not accrue interest. It is the time period in which you’re required to pay your credit company for the purchases you make with your credit card in a given billing cycle. It is interest free provided that you’ve paid what you owed in your last bill in full and on time.

The minimum number of days for a credit card grace period is 21 days. That’s because federal law requires credit card companies to issue credit statements to clients at-least three weeks before the minimum payment is due. But the credit card companies have their own discretion for grace periods lasting more than 21 days. 

Issuers usually issue different credit cards like Visa, Mastercard and American Express and the grace period for a given issuer is usually the same for their credit cards. In this sense, the grace period depends on the issuer rather than the network. The grace period for most credit card companies is 25 days on average. 

What Happens to Grace Period If You Don’t Pay Your Full Balance

As has been discussed earlier, you lose grace period on your credit card if you don’t make timely payments within the billing cycles’ due dates. Interest is charged on your remaining balance and worse, grace period is removed for subsequent purchases when you’re carrying a balance. 

That means you’re not only going to pay interest on your unpaid balance but will also accrue interest immediately on any goods or services you purchase through the credit card in the next billing cycle.

So how do you get your grace period restored? The time it takes for grace period restoration varies by creditor. The only constant is that you’d have to pay your subsequent credit bills on time. It’ll usually be several billing cycles where you paid on time before your grace period is restored. 

Which Transactions Do Not Qualify for Grace Periods

You get a grace period for whatever goods or services you purchase on your credit card. However, there are some types of transactions that do not qualify for a grace period.

1- Cash Advance

A grace period will not apply if you get a cash advance with your credit card. On the contrary, cash advances incur some of the highest interest rates, as high as 25% or 30% when it comes to credit cards. The reason for such high interest rates on cash advances is that cash advances are seen as a potential risk with people taking them with credit cards being more likely to default on their credit debt. 

While not always the case, cash advance could usually be seen in the context of problematic cash flows. You should prioritize getting a cash advance from your deposit or savings account. Needing a cash advance from a credit card signifies that you do not have enough cash in hand from other sources and that is seen as credit-risky.

2- Balance Transfer

Balance Transfer refers to transferring your credit card balance to another account linked to a different credit card. People often do this to switch to a credit card with 0% introductory interest rate to avoid interest on their balance. However, balance transfer can mean carrying a monthly balance and that’s a sure way to lose grace period on your credit card. 

3- Convenience Check

A convenience check is a set of checks issued by your credit card company that you can use to withdraw cash against your credit limit yourself or write it up for someone else if you have to pay someone. However, again, the practice is not considered relatively credit-healthy and therefore, lacks a grace period. Convenience checks start accruing interest immediately. 

List of Visa Credit Cards and Their Grace Periods

Several top US creditors issue Visa cards and have their own grace periods. Notable among those include:

  • Bank of America: 25 Days
  • Barclays: 23 Days
  • Chase: 21 Days
  • Discover: 25 Days
  • U.S. Bank: 24 Days
  • Wells Fargo: 25 Days

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