Statement Balance vs. Current Balance: What’s the Difference?

It’s easy to get mixed up when it comes to statement balance vs current balance. You want to pay off your card on time, but which of these balances should you pay? Which one helps you avoid interest? 

Simply put, your statement balance is what you owe from last month, and your current balance is the total amount you owe right now. Staying up-to-date on your payments has a huge impact on your credit score, so understanding this difference is crucial. Here’s what you need to know. 

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What is a statement balance on a credit card?

Your statement balance includes your charges from the last statement period. It doesn’t include any new charges you’ve made since your last billing cycle ended. Billing cycles usually last 28 to 31 days, so you can usually think of a statement balance like last month’s tab.

Think of it like this: Let’s say your credit card billing cycle is June 1st to June 30th. You normally only use your credit card for basic bills, and during this period, you spend:

1. $400 on groceries
2. $100 on gas
3. $30 on subscriptions

Your statement balance at the end of June will be $530 (400 + 100 + 30 = 530). That’s your tab for the last billing cycle. 

At some point, you’ll get a bill from your credit card company saying, “Hey, pay us that $530 you owe us by July 25 or we’re going to charge you interest.” 

If you pay off your balance in full by July 25, then you won’t get charged any interest. But if you leave part of your balance unpaid, then it will start collecting interest.

So, how is this different from your current balance? Let’s discuss 👇

What is a current balance on a credit card?

Your current balance is the total amount you owe on your card right now, including any charges and/or payments you made since your last statement closed. Let’s break it down with another example…

Let’s say that your last statement ended on June 30th with a balance of $530. Then, on July 2, you spent:

• $125 because your favorite artist was in town
• $100 on your weekly grocery run
• $30 to gas up your car

Your current balance is now $785 because it includes your last statement’s charges ($530) plus your most recent charges ($255).

Let’s say you get your paycheck (holla!) and then promptly pay off your statement balance of $530. Your current balance will then drop to $255 (785 – 530 = 255), assuming you haven’t made any new charges.

💡MoneyLion Tip: Be wary of pending transactions. These are charges that have been initiated but not yet fully processed or settled. They might not always show up on your balance, so don’t forget to include these transactions when doing your budgeting.

OK, so what’s the difference between statement balance and current balance? Let’s break it down in even simpler terms.

Statement vs current balance: What’s the difference?

The main difference is that your credit card statement balance includes purchases from your last statement period, while your current balance includes all purchases from last month plus any charges or payments you’ve made since then.

It’s common for your current balance to fluctuate more than your statement balance. Usually, your current balance is higher than your statement balance because it includes your most recent transactions. But it can also be lower because if you receive a refund or a chargeback. 

Should I pay my statement balance or my current balance?

It’s generally better to pay off your current balance whenever possible because this is the total amount that you owe. But there are a few different approaches you can take: 

1. Paying off your current balance: This is usually the most ideal option because it ensures that you never fall behind on your credit card bill.
   1. Pros: Never pay interest or fall into credit card debt. 
   2. Cons: Requires more cash, which you might not always have.

2. Paying off your statement balance: This is another solid option. You’ll still be golden as long as you pay off your statement balance on time.
   1. Pros: Never pay interest or fall into credit card debt. 
   2. Cons: By focusing on last month’s statement, you run the risk of losing track of your current bill. 

3. Paying the minimum payment: This isn’t ideal, but it’s better than not making a payment at all.
   1. Pros: Your credit score shouldn’t get dinged.
   2. Cons: Your balance will start to accumulate interest.

So, to quickly recap…📝

1. Do your best to pay off your current balance whenever possible.

2. If cash is tight, at least pay off your statement balance from last month. 

3. If cash is really tight, at least make the minimum payment.

Making the minimum payment is still very important because missing payments can hurt your credit score (on-time payments account for 35% of your FICO score).

Learn more in our Ultimate Guide on How Credit Cards Work

Statement Balance vs. Current Balance: Take Control of Your Credit

Knowing the difference between your statement balance and current balance isn’t just financial trivia. It’s the key to dodging interest charges, staying on top of your credit card debt, and boosting that score.

Whether you’re swiping for gas or splurging on concert tix, pay smart and make sure that your credit card is working for you, not against you.

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