Credit card companies use a wide variety of strategies to calculate your statement cycle, but they inevitably bill you monthly. Understanding how your statement cycle works can help you avoid late fees, minimize the interest you pay on purchases and improve your credit score. You'll need either a copy of your credit card agreement or a bill to discern your statement cycle.
Billing Period: Calculating Your Costs
The billing period is the time during which your credit card company tallies your expenses for the month and reports them on your bill. This period lasts for a month. The specific billing dates may change by a day or two, but they'll generally cover the same period of time. For example, a cycle that extends from the 15th of one month to the 15th of the next will generally always calculate your expenses from the middle of one month to the middle of the next. If you make any transactions at the close of the billing cycle, you won't see them on your paper statement until next month.
Statement Date: Asking for Money
The statement date on your statement cycle is usually the same day as the last day of the billing period, but it could be a few days later. This is the date your bill is actually issued, and your bill will be due a few weeks after that. The statement date and the due date are not the same. Instead, your credit card company establishes a regular due date, and your bill is due on this date each month.
Standard Billing Cycles
Credit card companies generally establish standardized billing cycles, which means you'll get your statement around the same time each month. This enables card companies to rapidly process all of their statements at once, and makes it easier for consumers to pay their bills. If your card company is purchased by a new company, however, your statement cycle could change.
How Cycles Affect Credit
Paying your bill by the due date affects your credit because late payments will be reported to the credit bureaus after that time. You might also be charged additional fees and interest. Further, if you pay your entire balance off at the end of each statement cycle, you won't have to pay additional interest on your card.
- U.S. Federal Reserve: Reading Your Bill
- U.S. Federal Reserve: New Credit Card Rules
- CreditCards.com: Learn Your Credit Card Billing Cycle to Avoid Late Charges
- Citi: Interest Charges and Fees
- Experian. "Should I Pay My Credit Card Bill Early?" Accessed July 25, 2020.
- Consumer Financial Protection Bureau. "Definition and Rules of Construction." Accessed July 25, 2020.
- Federal Trade Commission. "Credit Card Accountability Responsibility and Disclosure Act of 2009." Page 10. Accessed July 25, 2020.
Van Thompson is an attorney and writer. A former martial arts instructor, he holds bachelor's degrees in music and computer science from Westchester University, and a juris doctor from Georgia State University. He is the recipient of numerous writing awards, including a 2009 CALI Legal Writing Award.