No, it would not necessarily be illegal if that were the terms of the card. The reason for grace period is for three reasons: 1. Encourage the payment 2. Encourage the use 3. Collection of merchant fee discounts that the seller pays.
For those who PIF, this would be a huge disincentive and encourge the use of either debit cards or AMEX or Signature/Charge type cards that do not charge interest and must PIF at statement. For those who carry a balance, this would not be as much of a disincentive since they would pay the interest anyway.
I could see subprime cards that tend to market to people with no options and that will carry a balance doing this. But I have a hard time seeing prime banks doing this. There is much more money in the merchant discounts than in the interest (unless it is astronaut APR). In addition, it would require nearly universal acceptance and implementation of this policy otherwise the individual CCC's who issued such terms would soon find themselves quickly losing their prime customers to other CCC's who did not (which would use this as a marketing advantage).
