God shows both mercy and grace, but they are not the same. Mercy withholds a punishment we deserve; grace gives a blessing we don't deserve.
In mercy, God chose to cancel our sin debt by sacrificing His perfect Son in our place (Titus 3:5; 2 Corinthians 5:21). But He goes even further than mercy and extends grace to His enemies (Romans 5:10).
He offers us forgiveness (Hebrews 8:12; Ephesians 1:7), reconciliation (Colossians 1:19-20), abundant life (John 10:10), eternal treasure (Luke 12:33), His Holy Spirit (Luke 11:13), and a place in heaven with Him some day (John 3:16-18) when we accept His offer and place our faith in His sacrifice.
Grace is God giving the greatest treasure to the least deserving—which is every one of us.