Statement Balance Vs. Current Balance—The Difference And Why It Matters

Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations.Whether you’re a first-time credit card user or you’ve been using plastic for everyday purchases all your adult life, managing your credit card responsibly is crucial; paying your bill on time each month will save you headaches and unnecessary costs—both of which will multiply if you don’t.

Whenever your billing cycle ends, your credit card bill is generated. Once your statement is generated, your statement balance doesn’t change until your next billing cycle closes.Unlike your statement balance which represents the purchases and payments on your card during a set period, your current balance reflects all the charges and payment activity on your credit card account up to the date the statement was generated.

If you’ve made a purchase since your last billing cycle closed, go online to check your account and you’ll see your current balance is higher than your statement balance. The same is true if you were to make a payment after your billing cycle ended and did not make any other purchases. In this case, it’s likely your current balance would be lower than your statement balance.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.

You can set up automatic bill pay to allow your credit card issuer to withdraw the minimum payment amount from your bank each month to avoid missing or making a late payment; both of which can negatively impact your credit score.

Advisor You shouldnt owe anything. Debt is a social evil and people should be educated in avoiding getting in debt as much as possible...unless debt generates wealth then it is just a loss.

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