You might see 2 different types of balances on your credit card account – your statement balance and your current balance.
Your statement balance is your balance at the end of your billing cycle. Your current balance is the balance on your credit card at the present moment. It includes any posted charges, payments, credits, interest or fees since your last statement.
Read on to learn more about the differences between statement and current balances.
What is a statement balance?
Your statement balance is the amount you owe on your credit card at the end of a billing cycle. Your statement balance includes any balance you’ve carried over from previous billing cycles, plus any fees and interest, minus any payments and credits.
Credit card companies calculate your statement balance on the last day of your billing cycle (also called your closing date). These companies typically offer a grace period, which is the period of time between the closing date of each billing cycle and the payment due date, when interest is not charged on purchases if you pay the entire statement balance by the due date. If you do not pay this entire balance you can lose your grace period, meaning you would be charged interest on the portion of the balance you did not pay and also charged interest on the date other purchases are made in your current billing cycle. For this reason, paying off your statement balance in full every month on or before your due date helps you avoid interest.
Here's an example of how paying your statement balance works:
You start your current billing cycle with a statement balance from the previous billing cycle of $300. You make purchases totaling $400 during the current cycle before the due date to pay your statement balance from the previous billing cycle. You’re not accruing interest during this billing cycle because you’ve been paying your entire statement balance each month by the due date.
Your current balance before you make your payment is $700. If you pay your previous statement balance of $300 in full by the due date and close out your current billing cycle without making any more charges or payments, you'll end the billing cycle with a new statement balance of $400.
What is a current balance?
Your current balance is your credit card balance at the present moment. It can fluctuate based on purchases, fees, interest, payments and credits applied to your account.
Your current balance is a real-time indication of how much you owe on your credit card account.
Here's an example of how current balances work:
Your statement balance from your last billing cycle is $500. A week into your current billing cycle, you haven’t made any payments towards the statement balance but your payment due date has not past yet, so no interest has been charged on the balance. You’ve made purchases this cycle totaling $150 and a return for $50 that have posted to your account Your current balance is $600.
Which balance do I pay?
When you pay your bill online, you’ll typically have the option to pay the statement balance, current balance, minimum payment or choose a different amount.
Generally, if you’ve paid your statement balance in full by the due date each month, you can avoid interest. Let’s look at each option.
- Statement balance: Paying off your statement balance in full by the due date each month can allow you to avoid interest charges.
- Current balance: If you’ve carried a balance over from previous months, you can generally avoid further interest charges once you pay your current balance. How ever, you should check the terms of your credit card account to determine if any new purchases made after this payment would immediately be charged interest or if a grace period would apply.
- Minimum Payment: This is the minimum amount you must pay to avoid late fees or having a late or missed payment reported to the credit bureaus.
- Other amount: You can enter a number manually. This can be a useful option if you want to pay more than the minimum but can’t pay the entire statement balance, or if you want to pay more than the statement balance but not a higher current balance.
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.
