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HomeFinance & AccountingStatement balance vs current balance: What is the difference?

Statement balance vs current balance: What is the difference?

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How to Calculate Statement Balance?

Your credit card statement is like your monthly income. It consists of all the purchases and payments you made last billing cycle plus any unpaid balances from previous months, Interest on those accrued charges which can add up quickly if they go onto a higher tier rate.

You can find a full understanding of your statement balance by knowing when the billing cycle starts and ends.

You have different options for this, including 20-45 day periods or numbers that range from 1 to 12 months in length (depending on what type it is).

If you’re not seeing this, simply add up the number of days between your start and end date to calculate how long a billing cycle should be.

This will give a better understanding of when payments are due for those who use it as well – all transactions fall under one or two cycles per month.

Reason for Statement Balance higher than my Current Balance?

The statement balance is a static number that doesn’t change much over the course of your billing cycle, whereas the current balance can go up or down based on payments and purchases.

Regularly track your spending and know the process of how credit cards work. If you use the card for day-to-day purchases, then it may not match up with what’s shown on your statements.

Similarly, if payments have been made but no charges were put onto this account during that time frame – there could be a gap between balances.

In a way, the balance of your statement stays exactly where it was before. You may not even notice that something has changed because everything gets updated on this day and then sits there until next month’s cycle starts up again.

Charged Interest for Paying the Statement Balance?

Credit cards are great because they offer the convenience of being able to charge something without having cash on hand. However, there’s also a time after your statement ends and before the due date where you must pay at least minimum payment in order not to incur interest charges.

This is called “the grace period.” It applies even if it was for an advance fee as long as the funds were taken immediately (like with ATM withdrawals), then no additional fees will apply during these last few days apart from those associated with cashing checks or using other sources like savings accounts etc.

Avoid interest on the last day of your grace period. If you pay everything due by then, there will be no charges for principal and/or any accrued but unpaid interest at that point in time.

Should I Pay The Statement Balance Or The Current Balance?

Some people are happy to make only the minimum monthly payment on their credit card. They may be in for a rude awakening, though interest rates can get very high and paying more than what’s required means spending money you would have been better off not giving away.

Avoiding interest charges is important, You should make sure to pay off your statement balance and avoid making any new purchases.

It’s not necessary that you also pay down the current amount owed, as long as you have paid all of those pesky monthly bills already today- sounds like a plan for success right there.

A good way to keep your credit utilization low is by paying down the balance on any accounts with an outstanding amount.

Maintaining a low percentage against available limits will help you avoid loans from being turned into debts and ultimately lead to higher chances for repayment failure if there are financial difficulties in making these payments again as before.

Pending a financial emergency, it’s important to keep your statement balance low. This will help you avoid the negative effects on credit reported via Experian and TransUnion that come from having too many open accounts with high balances the higher this number gets, the worse things get for FICO scores as well.

Set yourself up for financial success by enrolling in autopay or using other reminders and keep your credit score in good shape.

Pay Off Your Statement Balance To Avoid Interest Charges

bank balance

If you have a credit card statement debt, be sure to pay it off before the due date of each billing cycle to avoid incurring interest charges.

By making this commitment, you avoid paying unnecessary fees that could potentially wipe out any progress made so far.

Avoiding late fines and bad credit marks by making the bare minimum payment on time is preferable, but it’s okay if you can’t.

Making an effort to pay off a portion of your entire balance by its due date will still give you some protection from interest charges while also keeping lines open for future borrowing opportunities.

Some credit card issuers offer grace periods, but not all of them do. If an issuer chooses to give their customers a 21 day period without any added interest charges and before billing begins again then that is what they must provide for you as well.

Using automatic payments to avoid interest charges

Online billing and payment options have made it possible for many credit card issuers to offer automatic payments.

If you have a credit card, check with your bank or issuer to see if autopay is available. If so and it’s not too much trouble for them (they might want some of their own money back), select “statement balance” as the automatic payment choice.

Autopay can help you avoid late payments and interest charges on your purchases. It’s also a good idea to set up autopay so that the money is automatically charged from your credit card every month, even if it’s just enough for an internet connection.

Automatic payment offers many advantages: not only does this ensure timely bill payers but over time these services actually increase in value as consumers learn about their benefits through word of mouth (or worse yet- heckling).


When it comes to cash advances, you need to understand that they are different from purchases. With these types of transactions, there is no grace period and interest will start accumulating as soon as the loan has been taken out.

It’s always a good idea to pay off any credit card debts as soon as possible, and if you took out an advance from your account just recently then this is even more important.

Make sure that by paying back what was owed in full with interest rates on loans or other fees included don’t take any risks.

How Your Current Balance Affects Credit Utilization Ratio?

credit card payment

Your credit utilization ratio will vary depending on what kind of account you’re carrying. If it’s a mortgage, for instance, then the best thing to do is pay off any outstanding balances as soon as possible so that they don’t affect your score and make borrowing easier in the years ahead.

How do you know if your credit utilization rate is too high or low? It’s important to keep an eye on the number of available lines of credit that are being used at any given time and try not to use more than 30% for each line.

The credit utilization rates that are calculated by the bureaus come from what they receive. Sometimes, this may be all of your statement balances but some might send current ones instead to make things easier on them and us as well.

Make sure the credit card company is reporting to all three bureaus, not just one. If you don’t know which day of each month it reports on for statement versus current balances speak with them and they’ll guide you accordingly.

Paying down your credit card balance is a good way to keep use of the money in it, and can help you if there are any worries about its utilization rate being too high.

A general goal for most people should be below 30% when looking at all available credits; this will ensure that they’re not spending more than what’s coming in from their monthly income or other sources like loans with lower interest rates.



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