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Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. SHARE: MilosStankovic/GettyImages June 24, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. John Egan is a freelance writer and content marketing strategist in Austin, Texas. He is a contributor for Bankrate and specializes in content focusing on personal finance, real estate and health and wellness. Among the outlets where John’s work has appeared are CreditCards.com, Forbes Advisor, Experian and U.S. News & World Report. He is the former editor-in-chief of the Austin Business Journal. Mariah Ackary is a personal finance editor who joined the Bankrate team in 2019, excited by the opportunity to help people make good financial decisions. Send your questions to Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Bankrate logo The Bankrate promise
At Bankrate, we have a mission to demystify the credit cards industry — regardless or where you are in your journey — and make it one you can navigate with confidence. Our team is full of a diverse range of experts from credit card pros to data analysts and, most importantly, people who shop for credit cards just like you. With this combination of expertise and perspectives, we keep close tabs on the credit card industry year-round to: Meet you wherever you are in your credit card journey to guide your information search and help you understand your options. Consistently provide up-to-date, reliable market information so you're well-equipped to make confident decisions. Reduce industry jargon so you get the clearest form of information possible, so you can make the right decision for you. At Bankrate, we focus on the points consumers care about most: rewards, welcome offers and bonuses, APR, and overall customer experience. Any issuers discussed on our site are vetted based on the value they provide to consumers at each of these levels. At each step of the way, we fact-check ourselves to prioritize accuracy so we can continue to be here for your every next. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Perhaps one of the most confusing parts of a credit card bill is that it contains two different balances: a statement balance and a current balance. Knowing the difference between these two amounts can help you save money on interest charges and get a tighter grip on your credit card debt. Here’s the difference in a nutshell: Your statement balance is the amount you owe at the end of a billing cycle, while your current balance is the amount you owe at a particular moment. What is statement balance
The statement balance shows the total dollar amount you owed on the last day of your credit card’s monthly billing cycle. You can find the statement balance on the monthly statement you receive from your credit card issuer. This dollar amount is the total of any purchases, interest charges, fees and unpaid balances that appeared on your account during the billing cycle, which can be anywhere from 28 to 31 days long. Keep in mind that the beginning and end of a monthly billing cycle can fall on any day of the month and aren’t dictated by calendar months. What is current balance
The current balance reflects all of the purchases, interest charges, fees and unpaid balances on your credit card at the time that you check it. That’s why it’s called your current balance — it’s a real-time balance. So, if you used a credit card to buy a pair of shoes after the statement balance was calculated, that purchase becomes part of your current balance. Depending on your credit card activity, the current balance can fluctuate from day to day or even minute to minute. Why is statement balance different from current balance
It’s pretty common for the current balance to be higher than the statement balance. Here’s an example: Let’s say your credit card company issued your statement on July 31, and the statement balance was $525. Your payment won’t be due until at least 21 days later, thanks to the In the meantime — before you pay that bill — you buy those shoes we mentioned earlier, which cost $75. With the new $75 shoe purchase, your current balance would increase to $600, but your statement balance would remain at $525 because the new purchase would show up as part of the next statement’s billing cycle. On the other hand, your statement balance could be higher than your current balance if you received a refund after your statement closed. Of course, both the statement balance and current balance should be the same if no transactions pop up in your credit card account between monthly billing cycles. Should you pay your statement balance or current balance
When you’re looking at your credit card bill, you might wonder whether it’s best to pay the statement balance or the current balance. Either will allow you to avoid interest, so it’s a matter of preference. Paying the statement balance means you’re paying exactly what’s due. You won’t be bringing any of your last billing cycle’s balance into the next month, which means you’ll pay no interest on those purchases (as long as you pay by the due date). Paying your current balance will pay for your statement balance plus any charges you’ve made since the end of that billing cycle. It will bring your balance to $0, which is good, but not necessary to avoid interest. Most credit cards allow you to automatically pay the statement or current balance each month through autopay, which is a great idea. Whichever you choose, autopay can help you rest assured knowing your payments will be on-time and interest-free every month. What if you can t pay the statement balance
If you don’t have enough money to pay the statement balance or the current balance, don’t worry. Just be sure to make the in order to avoid late fees and other penalties. Paying only the minimum due means you’ll start racking up interest charges on whatever the remaining balance is. Those interest charges will continue to pile up if you continue making purchases with your card, which then tacks on more interest charges and extends the amount of time it’ll take to wipe out your debt. If you can swing it, pay more than the minimum due each month so you can ease the pain of interest charges, lower your balance and get rid of your debt quicker. How your balance impacts your credit score
Both your statement balance and current balance affect your credit score. Every month, a credit card issuer typically reports your statement balance and current balance to the . These numbers can increase or decrease your , which is the amount you owe on all of your credit cards (your total balances) divided by the amount of credit you have available (your credit limits). So, if you charge $2,000 on your only credit account and your limit is $10,000, your credit utilization ratio is 20 percent. Why is this important? Your credit utilization ratio typically makes up 30 percent of your . The lower your credit utilization ratio is, the better. A can lead to better odds of being approved for credit, better interest rates on credit cards and loans, and higher credit limits. Experts recommend keeping your credit utilization ratio below 30 percent. To quickly determine your current ratio and understand your ideal spending limit, check out Bankrate’s . The bottom line
Reading credit card statements is a critical part of evaluating your finances. This includes monitoring your credit card statement balances and current balances. Watching those two numbers can help balance your budget by enabling you to avoid costly interest charges and more quickly reduce or eliminate credit card debt. SHARE: John Egan is a freelance writer and content marketing strategist in Austin, Texas. He is a contributor for Bankrate and specializes in content focusing on personal finance, real estate and health and wellness. Among the outlets where John’s work has appeared are CreditCards.com, Forbes Advisor, Experian and U.S. News & World Report. He is the former editor-in-chief of the Austin Business Journal. Mariah Ackary is a personal finance editor who joined the Bankrate team in 2019, excited by the opportunity to help people make good financial decisions. Send your questions to Related Articles