It is important for all new credit card users to have complete knowledge about the benefits and features of credit cards. One is likely to have doubts as a first time credit card user related to its balance, charges, and monthly statement.
Every month, the issuing bank sends credit card statements to its credit cardholders which contain complete details about the purchases and transactions that the cardholders have made, and the amount that needs to be paid by the due date.
Many credit card users get confused while checking credit card balance by seeing two types of balance on the net banking portal: current balance and statement balance.
The overview of all the charges and payments made to your account during one billing cycle will reflect on your statement balance. Once your statement balance is generated by the bank, it won't change till the end of your next billing cycle. However, that does not mean your credit card balance won't change.
As you continue using your credit card, you will notice your current balance which is the sum of all payments and charges to your account will increase until you make the payment. Your current balance could also be lower or higher than the statement balance based on the transactions you have made.
Given below are the tips that you can follow to avoid interest on your credit card dues:
Many credit card issuers are now able to provide automated payments to their customers through online payment and billing options. If your credit card issuer has an autopay option, you will be able to choose your statement balance as your automatic payment choice. The autopay option will help you to avoid interest charges and late fees on your transactions.
Your current amount may have an impact on your credit utilization ratio based on how your credit card issuing bank or company report your account balances to the consumer credit bureaus.
Your credit score may be impacted by your credit utilization rate, which is essentially how much of your available credit you are utilizing at the given time. The credit bureaus calculate the credit utilization rates based on the balances that they receive from the credit card issuing banks or companies. Many credit card issuers report the statement balances of their credit cardholder. However, some may send the current balances.
If you are concerned about your credit utilization rate, you need to get in touch with your credit card issuer to find out which balance they report to the credit bureaus. If your credit card issuing bank or company reports current balances rather than statement balances, ask your issuer which day of the month it reports. If your credit utilization rate is high, you need to pay your current balance.
If you are still unsure about whether to pay the current balance or the statement balance, we would recommend you pay the full statement balance before the due date in order to avoid the late fees and interest charges. On the other hand, you can also make the payment of your complete current balance to make it NIL.
If you are unable to pay the full statement balance within the billing cycle, it is advisable to pay the minimum amount required before the due date in any circumstance to avoid the late fees and interest charges.
It is advisable to prioritize paying your statement balance.
The statement balance reflects the payments and charges made during the recent billing cycle. On the other hand, the current balance shows the full amount you owe on your credit card.
Yes. It is always advisable to pay your credit card amount in full.
The best way to raise your credit score is to always make your credit card bill payment on time.
You can pay your credit card bills on or before the due date of your billing cycle.
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