Question: What is the difference between grace and mercy?
When I was growing up in church, I used to hear the saying, "Mercy is when you don't get what you deserve, and grace is when you get what you don't deserve." The idea was that mercy is withholding deserved punishment, and grace is an undeserved gift. In recent years, I have heard people say that when you first fail, you need grace, but if you continue to fail, then you need mercy.
Both ideas roughly represent what modern people mean when they say mercy or grace in English. But the Bible was written in Hebrew, Aramaic, and Greek, and so those definitions are not adequate when we read the Bible, although they aren't completely wrong, either.
So before we get simple, we'll have to get a little complicated. Words in all languages change their meaning depending on their context. For example, in English, the word head can refer to a leader, a bathroom on a ship, the froth on beer, a high peninsula, or many other things depending on the context. Grace and mercy in the biblical languages are no different - they have different meanings depending on the context.
Grace in the Old Testament: Grace is the translation of the Hebrew cheyn, meaning favor. Two good examples are "But Noah found grace / favor in the eyes of the Lord" (Gen 6:8) and "God is opposed to the proud, but gives grace / favor to the humble" (Prov 3:34). In these sorts of passages, cheyn refers to God (or people) being favorably disposed to do good things for someone.
Grace in the New Testament: Grace is the translation of the Greek charis. The basic sense of charis is a gift, or the generosity that inspires that gift. So when Paul says, "For by grace you are saved through faith..." (Eph 2:8), we can say that it is by God's sheer generosity that we receive the gift of salvation (for more on charis, see this post).
Mercy in the OT and in the Gospels: Mercy translates the Hebrew chesed (in the OT) and the Greek eleos and oiktirmos (in the NT). Mercy, like compassion, is when we see someone in need and respond with both pity and action. The blind man of Jericho cried out to Jesus for mercy, because he was in great need (Luke 18:38-39). The Samaritan is described as merciful because he helped the injured traveller (Luke 10:37). Giving to the poor is an act of mercy (eleemosune, Matt 6:2-4). When Jesus blessed the merciful (Matt 5:7), he was talking about people who respond with pity and action to those in need.
Mercy in Paul's letters: Paul usually uses mercy in the same way as the Gospels and the OT. But sometimes, Paul uses the word mercy to describe God's forgiveness of our sins (Rom 11:30-32, 1 Tim 1:13). This is closely related to the meaning of mercy in the rest of the Bible. If we see the hungry, showing mercy means feeding them; when God sees sinners, showing mercy means providing forgiveness.
So, what's the simple answer to the question? Grace and mercy are not totally different; both attributes are at work when God saves us. It is mercy because God sees our desperate need and acts out of pity. It is grace because God gives salvation generously. But we need to be careful not to see mercy and grace as only gifts from God. God expects us to give mercy by helping those in need, and to be gracious by being generous with all that we have.
The picture: Noah's Ark, by Peter Spier. One of my sons loved this book. The first page begins "But Noah found grace in the eyes of the Lord," and the last page shows Noah planting a vineyard. One day he asked me if God liked grapes. I said I was sure he did, but why did he ask? He answered, "Because Noah found grapes in the eyes of the Lord."