Do I have to pay the current balance or statement balance?

A credit card’s statement balance is what you owe at the end of a billing cycle, while the current balance is how much you owe on your card at any given time. To avoid interest charges, pay your statement balance in full by the due date monthly – there’s no need to pay your entire current balance in most cases.

That said, it’s important to understand the differences between these two amounts, and when you might want to pay the current balance rather than the statement balance.

Statement Balance vs. Current Balance Comparison

Statement Balance vs. Current Balance: Key Things to Know

A statement balance is what you owe at the end of a credit card’s billing cycle.

It includes purchases, balance transfers, cash advances, and any fees or interest charged. It also will reflect any payments you’ve made during the billing cycle. The statement balance is calculated on the statement closing date – the last day of the billing cycle.

Once the statement closes, the statement balance does not change until the next closing date. All new purchases, interest, and fees that post after the closing date will be added to the current balance and reflected on the next billing statement.

The current balance is a running tally of everything you owe on a credit card.

This includes the sum of all fees, interest, purchases, balance transfer amounts, and cash advances at any given moment, minus any payments made. Every time you make a new purchase with your credit card, it will be added to the current balance. Though this amount will eventually be due, it is not the amount currently due.

Cardholders only need to pay the statement balance to avoid interest, in most cases.

Paying your statement balance in full and on time every month means you won’t be charged interest. And if you pay your balance before your card issuer reports to the credit bureaus – usually on or within a few days after the statement closing date – your credit utilization will be lower than if you wait until the due date.

When You Might Want to Pay the Current Balance

Despite the fact that you don’t need to pay the current balance to avoid interest on purchases, there are reasons some cardholders would be better off paying the current balance instead of the statement balance.

Consider paying the current balance if:

• You took out a cash advance recently.
• You transferred a balance to the card at the card’s regular APR.
• You did not pay your statement balance in full last month.

Cash advances and balance transfers do not have grace periods like purchases normally do, so they begin accruing interest immediately.