Here we will discuss what is statement balance? And the things that comprise of in making a statement balance? As well as, what do you mean by negative and positive statement balance and its related terms that connect to the statement balance.
What Is Statement Balance?
The amount of money due or you owe or say you are liable to pay on a credit card is your statement balance. Here, what is statement balance is also the balance of the current period. As, different credit card has a different billing period, where normally cycle period of credit card statement is of 30 days. Thus, as a cardholder, you are liable and ought to pay your statement balance due.
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Statement Balance
Here, while discussing what is statement balance? We will discuss what things comprise of in making your statement balance. Thus, you call also say that the following things make up the statement balance as the statement balance meaning consists of all the money you owe plus all the charges levied on the balance after deducting payments you made to your credit card. So, it consists of the following:
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- The previous balance on the account
- New purchases and charges
- Interest charges
- Payments received
- Credits sent to the credit card account
- Other fees associated with credit card (annual fees, or monthly fees, penalties or late fees, etc.)
Thus, by now you know what is statement balance? As it is the amount of money you owe on your credit card or say the balance which reflects in your credit card statement.
What Is The Current Balance?
The amount of money you currently owe on your credit card is your current balance. This balance can also be known as the outstanding balance, which can change in case of the following:
- Purchases made from the credit card, which will add up to the balance you ought to pay, which will add to your current balance.
- Interest charges which are charged by credit card company on the amount you borrowed, which will add to your current balance.
- Fees of the credit card company, which will add to your current balance.
- Any payments received will be subtracted from the amount you owed. Resulting in deducting the current balance
- Any Credits further made, which will add to your current balance.
Note: Although, credit card statement is not updated on a real-time basis and thus, this balance at the end of your statement period is your statement balance.
What Is The Current Balance vs Statement Balance?
Your statement balance is the one that you owe on your credit card during the current cycle period. Whereas the current balance is also the one that you owe on your credit card but it takes real-time payments into consideration without seeing the billing cycle. Therefore, current balance and statement balance are almost the same for a billing cycle.
Why is my Statement Balance Negative?
When you have made future balance payment on your credit card to the credit card company, then your statement balance will be negative. It shows that your credit card company owes you money and you do not need to pay for the amount which is negative in statement balance. As this amount in negative statement balance will automatically get deducted from the total statement balance.
What Is The Remaining Statement Balance?
The remaining statement balance is the one that sets up as a new balance for the next statement period of the credit card after paying the statement balance and adjusting payments on the credit card amount due.
For example, your statement balance for November 2020 was $ 5500 and you made a payment of $ 6000 to the credit card company, then a negative balance of $ 500 is your Remaining statement balance or new balance.
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FAQ
What Is The Current Balance vs Statement Balance?
Your statement balance is the one that you owe on your credit card during the current cycle period. Whereas the current balance is also the one that you owe on your credit card but it takes real-time payments into consideration without seeing the billing cycle. Therefore, current balance and statement balance are almost the same for a billing cycle.
Do I Pay Current Or Statement Balance?
You should pay the current balance as the statement balance as it is the minimum amount due on your credit card upon which the liability and interest or penalty will be charged if not paid within the due date. Whereas, you can also pay your current balance which improves your credit utilization ratio by paying all the interest levied and other charges on the statement balance. So, you should pay for the current balance.
What Does It Mean By The Last Statement Balance?
The last statement balance tells us the last amount you owed on your last credit card statement at the end of your last billing cycle.
Should I Pay The Current Balance Or Statement Balance?
You should pay the current balance as current balance which improves your credit utilization ratio by paying all the interest levied and other charges on the statement balance. Whereas, the statement balance is the minimum amount due on your credit card upon which the liability and interest or penalty will be charged if not paid within the due date.
Why Did I Get A Statement Balance?
A statement balance is the total due after adding up all payments and purchases (credits and debits) you’ve made on your credit card during that billing cycle. It’s generated by your credit card company on the last day—closing date—of your billing cycle.
What Happens If You Pay Statement Balance?
Paying the statement balance means you’re paying exactly what’s due. You won’t be bringing any of your last billing cycle’s balance into the next month, which means you’ll pay no interest on those purchases (as long as you pay by the due date).
Should I Pay Statement Balance Or Current Balance?
Pay your statement balance in full to avoid interest charges
But in order to avoid interest charges, you’ll need to pay your statement balance in full. If you pay less than the statement balance, your account will still be in good standing, but you will incur interest charges.
Conclusion
Credit cards make your life and taking a small amount of loans easier, where you can even earn cashback and rewards too. But, credit cards also involve interest payments and penalties in case of late payment. So, you should make timely payments of the credit card statement or the statement balance. So, now it is clear what is statement balance? And why you need to pay for it.
In this article, we have successfully explained What is statement balance.
What is the difference between statement balance and outstanding balance
What is a statement balance?