The term is most often applied to credit cards: if spent funds are returned before the end of the grace period, the bank does not charge interest. However, the conditions are stricter than advertised.
The first limitation concerns what is covered. The grace period typically applies only to purchases and does not apply to cash withdrawals and transfers: interest on these operations accrues from day one, often with a separate fee. The second limitation is how the period is calculated. It is counted not from the date of purchase, but from the beginning of the billing cycle, so the actual grace period for a specific transaction is almost always shorter than the stated maximum.
The third limitation is full repayment. If the entire debt is not paid by the end of the period, interest is typically charged on the full amount from the date of each transaction, not on the remaining balance. Therefore, before using the card, it is worth clarifying three things: which transactions are covered by the grace period, from what date the period is calculated, and what happens with partial repayment.