The current balance (also called the credit card balance) reflects the current amount of all charges and payments made to your account up to that day. Just like the statement balance, it includes fees, interest, penalties and credits, as well as any purchases or payments you’ve made. If you don’t have enough money to pay the statement balance or the current balance, don’t worry.
Instead, a statement balance represents the purchases and payments on your card during a set period, known as your billing cycle, which falls between 28 to 31 days. Your statement balance is the sum of all the charges and payments you made during one billing cycle. And your current balance is a more “real time” view of what you owe on your credit card.
Your current balance updates every time you use your credit card and gives you a better representation of the total amount you owe on your credit card at any given time. Chase’s website and/or mobile terms, privacy and security policies don’t apply to the site or app you’re about to visit. Please review its terms, privacy and security policies to see how they apply to you. Chase isn’t responsible for (and doesn’t provide) any products, services or content at this third-party site or app, except for products and services that explicitly carry the Chase name. The two balances might be different, but both can affect your credit.
While most card issuers report your statement balance instead of your current balance, you should double check by calling or messaging your card issuer about which balance they report. Take a look at your credit card issuer’s terms and services to see if it offers anything like this. Your statement balance is more than your current balance because your current balance reflects the current total of all charges and payments to your account — and that changes every time a transaction occurs. If you’ve made a few purchases since your statement closing date (the date that one billing cycle closes and after which the next begins), then your current balance will be higher than your statement balance.
Using automatic payments to avoid interest charges
Under the FICO® Score☉ and VantageScore® credit scoring models, a ratio of 30% or higher can negatively affect your credit score. To figure out what your credit utilization ratio is, simply divide the current balance on your credit card by the spending limit for that credit card. For instance, if you have a balance of $500 on a card that has a $1,000 credit limit, you’re using 50% of your available credit on that card. In the meantime — before you pay that bill — you buy those shoes we mentioned earlier, which cost $75. With the new $75 shoe purchase, your current balance would increase to $600, but your statement balance would remain at $525 because the new purchase would show up as part of the next statement’s billing cycle. Earn Chase Ultimate Rewards® on everyday purchases and redeem for travel, cash back and more.
As you skim through your credit card statement or check your credit card account online, you’ll see a lot of different terms. Two that confuse many people are current balance and statement balance. Both the current balance and the statement balance affect your credit score.
What is debt to income ratio and why is it important?
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The current balance is your most up-to-date snapshot of your credit card transactions. Keep an eye on this because you’ll eventually have to make payments on it. And depending on when your balance is reported to credit bureaus, it may also impact your credit report, credit utilization and score. Also, credit-scoring companies use your credit utilization ratio when calculating your credit score.
- Reading credit card statements is a critical part of evaluating your finances.
- This can help keep your account in good standing and help protect your credit score.
- If you’re worried about this, check with your credit card issuer to find out which balance it reports to the credit bureaus.
- This post may contain links and references to one or more of our partners, but we provide an objective view to help you make the best decisions.
- Just be sure to make the minimum payment in order to avoid late fees and other penalties.
- The banks, lenders, and credit card companies are not responsible for any content posted on this site and do not endorse or guarantee any reviews.
Paying your current balance early—that is before it becomes part of your statement balance—is wise if you are planning to travel or otherwise be out of communication so you don’t have to worry about missing a payment. But it won’t cost you anything to let it build up until your next statement, just so long as you pay your statement balance on time in full every month. You can expect your credit score to be consulted whenever you want to finance a large purchase such as a home or car.
Pay your statement balance in full to avoid interest charges
Your credit utilization rate is simply how much of your available credit you’re using at any given time, which can affect your credit scores. On the other hand, if you’ve made a payment since your statement closing date and haven’t made any other transactions, then your current balance will likely be lower than your statement balance. Any amount not paid on your statement balance by the due date will roll over into the next month and start to accrue interest and depending on the credit card agreement, possibly finance fees. Which balance should be paid each month depends on a person’s financial goals and situation, but generally, it’s wise to pay off the statement balance every month so you do not incur fees and interest.
- The two balances might be different, but both can affect your credit.
- On the other hand, your current balance is the total amount of money you currently owe on your credit card, including your previous statement balance and any charges made thereafter.
- Alternately, paying your current balance in full by its deadline can improve your credit utilization ratio and your credit health.
- This includes monitoring your credit card statement balances and current balances.
Watching those two numbers can help balance your budget by enabling you to avoid costly interest charges and more quickly reduce or eliminate credit card debt. The current balance reflects all of the purchases, interest charges, fees and unpaid balances on your credit card at the time that you check it. That’s why it’s called your current balance — it’s a real-time balance. If charges you’ve made since your last billing cycle are creating more debt than you’re comfortable with, paying off your current balance early could help improve your credit utilization ratio and credit score. Issuers are required by law to provide monthly statements to their cardholders. One statement lists all the activity in one billing cycle, which is usually a period of 28 to 31 days.
How to find your statement balance and current balance
Power its potential with one of our business credit cards, like Ink Business Preferred℠, Ink Business Unlimited℠ or Ink Business Cash℠. Understanding the difference between your statement and current balance can help you manage your account. These two balances may be the same or one may be higher than the other, depending on the purchases you make. If you can swing it, pay more than the minimum due each month so you can ease the pain of interest charges, lower your balance and get rid of your debt quicker. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
You can check with your credit card issuer to find out which balance is being reported and when. Depending on how your credit card issuer reports your account balances to the consumer credit bureaus, your current balance could affect your credit utilization ratio. What if you’re not sure you can afford to pay your statement balance in full each month? Perhaps your income fluctuates from month to month, so you’re never sure what your bank balance will be. In that case, you can also set up automatic payments for just the minimum payment due. This will keep you from missing a payment or making a late payment, both of which can have serious effects on your credit score.
As long as you paid off your previous statement balance in full, you won’t be charged interest for the amount that remains — but you will need to pay it by your next due date. (It’s sometimes referred to as an “outstanding balance.”) And it may or may not be the same dollar amount, depending on your card usage and payments. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services.
What if you can’t pay the statement balance?
Note that if you’re carrying a balance from the previous month, that amount, along with the accrued interest, is also included in the amount due. Once your credit card statement is generated, the statement balance doesn’t change until the billing cycle closes and you start a new one. Your statement balance is the amount shown on your monthly billing statement.
