When you use your credit card for transactions – such as purchases and balance transfers – the amount you spend is added to your credit card balance. You’ll receive a statement at the end of your billing cycle letting you know how much you owe. The statement will also include any applicable fees and interest.
You have until the due date to pay the minimum balance, the statement balance or anything in between. Keep in mind that not paying the statement balance could result in interest charges. If you don’t pay the minimum balance by the due date, your payment is late.
Let’s look at how credit card payments work, what the numbers on your statement mean and when you can be charged interest.
Credit card balances
At the end of your billing cycle, you’ll receive your statement, either electronically or by mail. Your statement will show a list of transactions and charges, your minimum payment, statement balance and payment due date. Your minimum payment is typically a percentage of your balance or a fixed amount, whichever is higher. If your balance is lower than the set amount, your minimum payment may be the full balance.
When you log in to your account, you might see both a current balance and a statement balance. Your statement balance stays the same until your billing cycle is over, but your current balance reflects any charges (including interest, fees and purchases), payments and credits that have posted.
If you pay your statement balance in full, you won’t be charged interest. If you pay less than the statement balance, the remaining balance will roll over to your next billing cycle and accrue interest. There are exceptions to this – certain transactions, like cash advances, start accruing interest on the transaction date, regardless of whether you carry a balance.
How to make a credit card payment
There are a few ways to make a credit card payment.
You can pay online by logging into your account on desktop or through your bank’s app, selecting a payment amount (you can usually choose the minimum, statement balance, current balance or a specified amount) and choosing a payment date. If you haven’t made an online payment yet, you may be asked to link your bank account to your credit card account in order to make the payment.
You can also set up autopay to make payments automatically each month. As with manual payments, you select the amount – minimum payment , statement balance, current balance or a specific amount – and you will automatically make this payment each month, as long as there are sufficient funds in your bank account. Autopay can be a convenient way to help ensure your payment is on time.
If you don’t want to pay online, you can call your card issuer to pay by phone, pay at a bank branch or mail a check.
Missing and late credit card payments
If you make a partial payment (less than the minimum amount due), or pay after the due date, your payment will be late. You may be charged a late fee and, if you keep missing payments, you may be charged a penalty APR. Late and missing payments can damage your creditworthiness.
How does credit card interest work?
Most credit cards have a grace period, which is the time between when the billing cycle ends and your payment due date. During the grace period, you will not be charged interest on purchases if you didn’t carry a balance from your last billing period and you pay your current balance by the due date. If you carry a balance from one billing cycle to the next, you will be charged interest (usually daily) on the outstanding balance.
There are exceptions to the grace period, including cash advances , which begin accruing interest immediately.
Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.
