Grace period
Short answer
The grace period is the interest-free window between a purchase and your due date — up to about 45–50 days — but it applies only if you paid last month's bill in full. One partial payment and the grace period switches off, so new purchases start accruing interest from day one.
What it means
The grace period is the single feature that makes a credit card free to use. It is the gap between spending the bank's money and having to return it, during which no interest accrues.
The condition nobody reads
The window is conditional. Banks grant it only to accounts that cleared the previous statement in full. The RBI Master Direction on credit cards puts it plainly: if the total amount due is not cleared by the due date, the interest-free credit period is lost and interest may be levied from the date of each transaction. Miss that once and the card silently changes character: it stops being a payment instrument and becomes a running loan.
The common mistake
Assuming the grace period is a permanent feature of the card. It is a monthly privilege, renewed by your last payment.
The second mistake is thinking a small carried balance is harmless. The balance itself may be small; the loss of the grace period on everything you spend next is what actually costs money. See the minimum due trap.
Related
All figures on this page are indicative and dated. Rates and fees differ by bank and change over time. Always verify with your bank's official schedule of charges.
Frequently asked questions
How do I get my grace period back after losing it?
Clear the entire outstanding balance to ₹0 and keep it there through one full statement cycle. Once the account shows no carried balance, new purchases become interest-free again from the next cycle.
Do cash withdrawals get a grace period?
No. Cash advances on a credit card attract interest from the moment of withdrawal, plus a fee of around 2.5% (indicative, as of 2026). There is no interest-free window at all on cash.
Sources
The regulation and official pages this page is checked against. If one of them disagrees with us, it wins.
- Master Direction — Credit Card and Debit Card (Issuance and Conduct) Directions, 2022 — Reserve Bank of India
- FAQs on the Credit Card and Debit Card Master Direction — Reserve Bank of India
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Written and checked by the CardSamajh editorial desk · Last reviewed: · How we check this