What it is:
A grace period is a period of time, usually about 10 days, during which a past due amount can be paid with little or no penalty.
How it works (Example):
Let's assume your credit card payment is due on December 15. You forget to make the payment. On December 20, you remember. By then, though, it's too late. Your bill is .
However, if your account has a grace period, you can make the payment and themight not assess a late fee or other penalty.
Why it Matters:
Past-due bills often incur late fees, higher interest rates, penalties and other charges. Worst of all, the default and may charge off the balance. A grace period gives customers a chance to catch up quickly before it's too late. After that point, the might assign or sell the account to a collection agency, which try to collect the balance.might report the late payment to the reporting agencies, leaving a mark on your (and even lowering your ). In some cases, a bill get so (say, 90 or 180 days), that the considers the account in