What is the difference between Grace and Mercy? Mercy withholds a punishment we deserve; grace gives a blessing we don’t deserve. All we deserve is death and the grave. But God showed his mercy and cancel our sin debt which is death. Then he goes further than mercy and extends His grace and gives us forgiveness, reconciliation, abundant life, eternal treasure, His Holy Spirit, and a place in heaven with Him some day. Grace is God choosing to bless us rather than curse us as our sin deserves. Grace is God giving the greatest treasure to the least deserving—which is every one of us.