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Why do I have to pay current balance

The statement balance is the credit card’s balance at the close of the last billing cycle.
If your card’s billing cycle closes on the 25th of every month, then the statement balance may be the balance on the 25th.
An exception here could possibly be if you have a card with a 0% promotional APR.

You do not avoid interest entirely in this manner, but you at the very least pay down your balance whenever you can.
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What’s The Difference Between Statement Balance And Current Balance?

It is always smart to pay at the very least the minimum on your statement balance in order to avoid negative impacts to your credit.
Paying your statement balance in full means you will not accrue interest and helps maintain your credit utilization low.
Your statement balance on, may 16 will include your entire spending during that time period,

  • Opinions expressed here are author’s alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or elsewhere endorsed by any of these entities.
  • Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether.
  • Once your statement is generated, your statement balance doesn’t change until the next billing cycle closes.

The first number you’ll be offered is your statement balance, and when you decide on “make a payment” you’ll be presented with both statement balance and current balance.
One important factor of one’s credit history is credit utilization, or just how much of your available credit you’re using.
If your borrowing limit is $1,000 as well as your current balance is $300, you’ve got a 30 percent credit utilization.
The bigger your credit utilization, the more it can negatively affect your credit score.

Why Are Your Statement Balance And Current Balance Different?

By paying the statement balance in full, you will begin the next charge card billing cycle with a balance of $0.
You’d receive a letter in the mail telling you how much your charge card bill

  • payment penalties if you can’t pay the complete statement balance.
  • The bigger your credit utilization, the more it can negatively affect your credit history.

late fees.
However, your statement balance could possibly be higher than your current balance in the event that you received a refund after your statement closed.
Of course, both statement balance and current balance should be the same if no transactions pop-up in your credit card account between monthly billing cycles.
To be able to maintain a minimal credit utilization rate, consider reducing your spending or making periodic bill payments throughout your billing cycle and that means you have less statement balance.