Statement balance vs. current balance: What’s the difference?

April 30, 2021

two people discussing looking at debt statements

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Your statement balance is an overview of all purchases and credits during the previous billing cycle, while your current balance (also referred to as your “outstanding balance”) is the real-time figure of how much you owe on your card based on purchases and payments. Keep reading to learn more about these two balances so you can better understand how your credit card works.

How Is My Statement Balance Calculated?

Your credit card statement balance consists of all of the purchases and payments you made last billing cycle plus any previously unpaid balances and the interest those accrued. It is generated on the last day of your billing cycle, also called the closing day.

infographic that shows how statement balance is calculated

In order to understand your statement balance, you need to know when your billing cycle is. You can find this on your monthly statement, which will list a start and end date. It may also list the number of days in the billing cycle, which can span anywhere from 20 to 45 days.

If you do not see this, simply add up the number of days between your start and end date to calculate the length of your billing cycle. This will give you a better understanding of when to make payments and which transactions fall under which cycle.

Why Is My Statement Balance Higher Than My Current Balance?

Since your current balance is a dynamic, always-changing number based on payments and purchases, it may be higher or lower than your statement balance, which is only updated on the closing day of your billing cycle.

If you use your credit card to make day-to-day purchases, your current balance could be higher than your statement balance if you have not made any payments. Alternatively, if you have made payments on your card but have not made any purchases, your current balance would be lower than your statement balance.

Your statement balance remains the same until the closing day, at which time it will update with all payments, purchases, interest and fees accrued during that cycle.

Do You Get Charged Interest If You Pay the Statement Balance?

Every credit card has a period of time after the end of a billing cycle and before the due date in which you must pay at least the minimum payment. The Credit CARD Act of 2009 states that all issuers must give borrowers at least 21 days to pay from the time of the last statement, although many issuers give up to 25 days. This period is called the grace period, and no interest accrues during this time, with the exception of cash advances.

If you pay your entire statement balance by your due date, you will not be charged interest. While you may see a current balance, you won’t be charged interest on that until the end of your grace period (AKA your payment due date).

Should I Pay the Statement Balance or the Current Balance?

When making a payment on a credit card, you can choose to simply make the minimum payment each month. However, credit cards come with high interest rates, and paying only the minimum payment each month will likely cause you to spend a lot in interest.

If you want to avoid interest charges, you should aim to pay off the statement balance. You may also choose to pay off your current balance, although this isn’t necessary to avoid interest. As long as your statement balance is paid off, you’re in good shape.

infographic that encourages paying statement balance in full

While paying down your current balance isn’t necessary in relation to interest payments, it may help you lower your credit utilization, or how much of your credit limit you’re using. As a general rule of thumb, it’s best to keep your credit utilization at or below 30 percent of your credit limit.

While your current balance is not reported to credit bureaus in real time, it may be advantageous to pay it down so that you’ll have a lower statement balance—which is the number that affects your credit score.

Staying on top of credit card payments by enrolling in autopay or using other reminders is a great way to keep your credit score in good shape and set yourself up for long-term financial success.

Reviewed by Alexis Peacock, an Associate Attorney at Lexington Law Firm. Written by Lexington Law.

Alexis Peacock was born in Santa Cruz, California and raised in Scottsdale, Arizona. In 2013, she earned her Bachelor of Science in Criminal Justice and Criminology, graduating cum laude from Arizona State University. Ms. Peacock received her Juris Doctor from Arizona Summit Law School and graduated in 2016. Prior to joining Lexington Law Firm, Ms. Peacock worked in Criminal Defense as both a paralegal and practicing attorney. Ms. Peacock represented clients in criminal matters varying from minor traffic infractions to serious felony cases. Alexis is licensed to practice law in Arizona. She is located in the Phoenix office.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

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