Mercy (compassion or forgiveness) can be shown toward an individual and the individual can still be punished or harmed.
Grace (free and unmerited favor) on the other hand is complete forgiveness.
Mercy is in OT 208 and in NT 53 – compassion or forgiveness shown toward someone whom it is within one’s power to punish or harm.
Grace is in OT 37 and in NT 122 – the free and unmerited favor of God, as manifested in the salvation of sinners and the bestowal of blessings.
As the Scripture is searched and compared it can be concluded that there is a difference between Mercy and Grace.
The Grace God gives to Believers is because He has Mercy (Romans 9:15 …, I will have mercy on whom I will have mercy, and I will have compassion on whom I will have compassion.), and it is given as a free gift (Ephesians 2:8-9 For by grace are ye saved through faith; and that not of yourselves: it is the gift of God: Not of works, lest any man should boast.)
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