Glossary
Statement balance
A credit card's statement balance is what you owed when the billing cycle closed; paying it in full by the due date avoids interest on purchases, while the current balance also includes charges since then.
The statement balance is usually what the issuer reports to the credit bureaus, so paying before the statement closes lowers the utilization on your credit report.
Work it out
Related terms
- Grace periodA credit card's grace period is the time between the end of a billing cycle and the payment due date, at least 21 days, during which new purchases charge no interest if you paid the last statement in full.
- Credit utilizationThe share of your credit card limits you are using, overall and on each card; lower is better for credit scores, and under 30% (ideally under 10%) is the usual guidance.
- Minimum paymentA credit card's minimum payment is the least you must pay by the due date to keep the account in good standing, usually 1% of the balance plus interest, or 2% to 4% of the balance, with a floor of about $25 to $40.
Sources: CFPB: Regulation Z, 12 CFR 1026.7