Interest Grace Periods for Credit Cards

An interest grace period is a time frame during which a borrower can avoid interest accrual on new charges. A borrower is considered to be in an interest grace period if the full balance of the previous statement was paid by the due date. This is a common feature in credit card programs designed to incentivize on-time payments and provide borrowers with flexibility in managing their cash flow.

How It Works in Canopy

Eligible Transactions: Grace periods in our system apply to all charges uniformly.
Interest Calculation During Grace Period: No interest is accrued if the borrower pays the entire balance by the statement due date. If the full payment is not received, interest is calculated from the day the line of credit exits its grace period status, with Canopy’s daily balance method ensuring accurate interest accrual.
Supporting Retroactivity: Canopy’s retro engine can handle scenarios where grace periods were misapplied or if a lender needs to adjust terms retroactively.

Canopy empowers lenders with precise, flexible interest management, including full support for interest grace periods with accurate computation, retroactive adjustments, and seamless integration, lenders can stay profitable, compliant, and ready for the future.