Current Balance vs Statement Balance 

Current Balance vs Statement Balance

Your statement balance is the latest debt due on your credit card. It includes all unpaid costs up to the date of your query. Especially if you use your credit card daily, they often differ. 

As a cardholder, you must pay your statement balance in full or in part to prevent unfavorable consequences. This article outlines the differences between Current Balance vs Statement Balance.

Watch the below video on Current Balance vs Statement Balance:

Current Balance vs Statement Balance

Regular purchases: Paying off your bill balance will avoid regular purchases interest. The purchase APR only applies to unpaid portions of your statement debt. If your current amount is over $0, you won’t be charged interest as long as your statement is paid in full. 

Cash advances cause problems with the statement/current balance topic because they lack a grace period, as explained below. 

How to find your statement balance 

Your issuer normally displays your statement balance and current balance on the main page when you log in. 

In the image below, the left side indicates a zero balance. Neither a charge nor a payment was made on the card in the preceding billing cycle. The right side (“Total Balance”) indicates a $257.46 balance. Since the statement hasn’t concluded yet, no payment is due until the next billing cycle. 

How to read current balance 

Like the statement amount, your current balance displays all charges and payments made on your credit card account up to the date the statement was created. 

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Your current balance isn’t the same as your balance statement. Every time you use your credit card, your current balance updates, giving you a better idea of how much you owe at any one time. 

Why Do Your Statement and Current Balances Vary?

If you use credit cards, make payments, and check your account balance frequently, your current amount and statement balance may be different. 

Because your account activity continues to update your current balance, you can see purchases, payments, deposits, and interest even after your billing cycle has ended. 

If you’ve made purchases since your last billing cycle, you’ll find your current amount is larger than your statement balance. 

A $1,000 transaction made between the first and 28th of the month will result in a $1,000 statement balance as of the 28th. 

If you add $500 to your card on the 29th of the month, your statement balance remains $1,000, but your actual balance is $1,500 because the purchase was made after your billing cycle ended. 

It’s the same if you pay after your monthly period ends without making any purchases. In this instance, your current balance is likely to be lower than your statement. 

Which Balance Pay? 

Depending on your financial goals and position, you should pay off your statement balance every month to avoid penalties and interest. 

Not paying your statement balance by the due date will result in interest and, depending on your credit card agreement, finance costs. 

Even if you can’t pay your entire statement balance every month (which is fine, because that’s how credit card companies make money), you should always aim to pay at least the minimum to maintain your credit score and prevent late fees. 

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You can set up automatic bill pay to have your credit card company deduct the monthly minimum payment from your account to avoid missing or being late. 

If you have extra money to pay off your credit card account later, you may always make an extra payment. 

Does owing money hurt your credit score? 

Every month, at the end of the payment cycle, your credit card provider reports your credit utilization to the credit bureaus. While most issuers send statement balances, some send the current balance. You can ask your credit card company when and which balances are reported. 

The Credit Bureaus will determine your credit usage rate based on the amounts received from your credit card provider. 

Your credit usage rate is one of the most critical aspects in your credit score, affecting your chances of getting new credit cards, better interest rates, and greater credit limits. Your credit score will be checked everytime you apply for a loan to buy a home, RV, car, or even rent an apartment. 

A low credit usage rate is defined as a current balance below 30% of your entire credit limit in the FICO and VantageScore credit scoring models. 

Current Balance vs Statement Balance: Conclusion 

Your financial preferences will ultimately determine whether you pay your statement balance in whole or monthly. Paying your current debt early (before it becomes part of your statement balance) is smart if you plan to travel or otherwise be out of touch. It won’t cost you anything to wait until your next statement, as long as you pay your monthly statement balance in full. 

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Managing your debt, reaching your financial objectives, and getting the most out of your credit cards requires understanding the difference between the two balances.

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