Grace is called "undeserved pardon" in some circles. That's part of it, to be sure. But there's more.
Grace -- which comes from absolute love -- is the foundation for the way an eternal, limitless, perfect, holy God interacts with a physical, limited and very much imperfect humanity (that would be you and me both). Hey, God is perfect and we aren't, so how else would he deal with us, than by grace? Would you let the Three Stooges into your house??
I'll give you an illustration from my own life (I know, you didn't ask for one, but it's here anyway). Years ago, I was divorced. It wasn't pretty. Divorce never is. I figured, well, that's it for me, God won't ever let me be married again. Or it will be five or ten years of being single, and I'll finally find someone I can be moderately happy with.
Wrong on both counts. God is gracious, not vengeful. It was only two years, and I met somebody that has absolutely taken my breath away, over and over, as I see God's hand in our relationship. I'm happier than I ever thought possible, and more fulfilled in this marriage than I thought marriage could be. It's still work -- it always is -- but it's amazing.
Grace is something we can't earn and couldn't qualify for in a million years. It's a gift, that's all. And I'm here as one of the prime examples of God's graciousness. Like Paul said: 'This is a trustworthy saying, and everyone should accept it: “Christ Jesus came into the world to save sinners”—and I am the worst of them all.'
I'm glad it's grace not works. How about you?