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Credit Card Statement Balance vs. Current Balance

Have you ever gone to pay your credit card bill and noticed that you have two balances: the statement balance and the current balance? Turns out each balance is different, but they can often be the same amount. If having two balances confuses you, don’t worry. You’re not alone! Below we’ll explain the difference between the credit card statement balance and the current balance, plus which one to pay to avoid interest charges.

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Credit Card Statement Balance

The statement balance is the main balance on your credit card bill. This is the full amount that you owe. To avoid accruing interest, you’ll want to pay the full statement balance by the due date. Paying on time will also avoid penalty fees and a higher APR. Your statement balance will change from statement to statement, depending on how much you spent within each statement cycle.

Credit Card Current Balance

The current balance changes from day to day. That’s because the current balance is the amount you have currently spent on the card. If you use your credit card every day, the current balance will increase accordingly. If you make returns, the current balance will decrease accordingly.

Credit Card Statement Balance vs. Current Balance

Credit Card Statement Balance vs. Current Balance

Unless you check your credit card account daily, you usually won’t notice the difference between the statement and current balances. If you only see your account information on your monthly statements, the balances will be the same.

However, your current balance can be higher than the statement balance if you have spent more than you’ve repaid. This happens during the grace period you have to pay your bill. Since you’re constantly using your card, your current balance will increase. As that happens, your statement balance will remain the same since that’s what you owe for the previous statement cycle.

Let’s look at an example. Say you’ve spent $500 on your credit card in a statement cycle. Your bill comes and both your statement and current balances are $500. The next day, you haven’t paid your bill, but you spend $30 on your card. At that point, your statement balance will still be $500. But if you check your current balance, it will show $530.

Ideally, you’ll pay the statement balance in full before its due date. You should be careful about paying the minimum amount on your credit card statement. While paying the minimum avoids a late fee, it allows your balance (both statement and current) to accrue interest. Then you end up owing more money than necessary. If you’re late on a payment, you could face heavy penalties, including a late fee and possibly a penalty APR.

The Takeaway

Credit Card Statement Balance vs. Current Balance

The difference between your credit card statement balance and current balance essentially lies in when you look at your account. The balance amounts will often be the same amount, but there’s no need to worry if they’re different. What is important is that you pay off at least the minimum balance every statement cycle before the due date. That way, you can avoid a penalty APR and penalty fees. And ideally, you’d be paying the entire balance in full and on time each cycle to avoid paying interest charges.

If you’re worried about staying on track, consider working with a financial advisor to draft a financial plan. Sometimes it’s easier to stay on track if you have a clear road map laid out and your financial goals defined.  A matching tool like SmartAsset’s can help you find a person to work with to meet your needs. First you’ll answer a series of questions about your situation and your goals. Then the program will narrow down your options to three fiduciaries who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.

Tips on Keeping Your Credit Card Balance Down

  • Credit cards can be tempting things! You get to spend money, without really spending it – until the bill comes. Then you realize just how much you owe your credit card issuer. When using a credit card, it certainly helps to spend only what you know you can afford. It’s easy to trick yourself into thinking you can afford it all, but it’s better to be safe than sorry for overspending.
  • If you spend only what you can afford, paying your credit card bills will be much easier. Your balance will be smaller and more manageable in one payment. If you’re unable to make a payment in full, you’ll end up carrying over a balance. This balance will then grow and grow with interest until you repay the debt fully.

Photo credit: ©iStock.com/Antonio Guillem, ©iStock.com/stocknroll, ©iStock.com/littlebloke

Lauren Perez, CEPF® Lauren Perez writes on a variety of personal finance topics for SmartAsset, with a special expertise in savings, banking and credit cards. She is a Certified Educator in Personal Finance® (CEPF®) and a member of the Society of American Business Editors and Writers. Lauren has a degree in English from the University of Rochester where she focused on Language, Media and Communications. She is originally from Los Angeles. While prone to the occasional shopping spree, Lauren has been aware of the importance of money management and savings since she was young. Lauren loves being able to make credit card and retirement account recommendations to friends and family based on the hours of research she completes at SmartAsset.
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