Statement Balance vs Current Balance: How To Tell The Difference

Credit cards give people the convenience to spend money for their wants and needs. Unfortunately, when they see their billing statement, they might get overwhelmed.

What is the Statement Balance?

The statement balance is the amount charged on a credit card within a billing cycle. It is the number of days that defines a billing cycle, such as 30 days or 31 days.

What is the Current Balance? The current balance is the overall balance regardless of the billing cycle. This definition is different from a statement balance, which is limited by the billing cycle.

How Does the Balance Impact Your Credit Score? The higher the credit score, the more creditworthy a person is to qualify for the best credit.

Which Balance To Pay On a Statement? A credit card statement comprises three balances: minimum balance, statement balance, and current balance. paying the statement balance is the surest way to avoid paying any interest charges!

How To Calculate How Much Interest Charged

Three factors will determine the amount of interest charged: the number of days in a billing cycle, the annual percentage ratio, and the average daily balance.

How To Save On Paying Interest Charges

Pay Off The Entire Balance The fiscally responsible thing to do is pay off the statement balance’s total amount before the statement’s closing date.

Make Multiple Payments Within Billing Cycle There comes a moment when a person can’t afford to pay the full card bill. They could pay the minimum to avoid the late fee, but they’ll still be carrying a balance and won’t avoid interest charges.

Avoid Cash Advances Cash advances are similar to short-term loans that allow a borrower to withdraw cash immediately against their line of credit. However, they get charged a higher interest rate! Additionally, the interest starts getting applied on the same day of withdrawal.

We live in a digital world where you don’t have to carry cash anymore. Credit cards make purchases easy and convenient. However, the surest way to avoid paying any interest charges is by paying the entire statement balance!

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