Are you a credit card user and don’t know much about the different terms used for credit cards, like what is statement closing date or credit card scores? Your credit card statement closing date is the day your monthly billing cycle ends. It’s also the last day you can make purchases on that month before any new charges apply to next month’s bill and leave a negative balance if there are not enough credits for all of them.
Everyone needs to know these terms to help them save their money and not get any extra charges. It is not only to keep your credit card score, but it will also help you understand the basic terms, and you will be secure from any problem. Make sure to pay off your bill on time and complete payment for your reliability and ease so you’ll not bother too much with different issues.
Credit Card Statement Closing Date
Credit card transactions are usually compiled at the set time known as the billing cycle, and at the end of its fixed period, the last day is called the credit card statement closing date. Statement closing date lasts between 21 to 25 days depending on your card. On a grace period card, it takes 21 days for a statement closing date, and it is better to pay it before the due date to avoid interest charges and maintain your credit card score moderate.
Read More: What is a Statement Credit
The date on which the creditor calculates finance charges, adds them to your balance, and the credit card company will prepare your bills is known as the closing date. Credit card statements are compiled depending on these closing dates, including charges from the last closing date to the current closing date.
Usually, people say that the due date and closing dates are the same terms, but they have different meanings. The closing date is the last day of the billing cycle, while the due date is the payment of charges from the previous closing date.
What Is Grace Period?
Grace period means there are no interest charges on your credit card until you pay the complete statement that appears on your card every month; paying the total amount of the credit card statement before the closing date ensures the benefit that no outstanding card balance is reported to the credit bureaus, increasing your credit card score.
Credit Card Score
The credit score is the most critical term regards the statement closing date as the payment made on the closing date affects the credit card score significantly. A credit score is a three-digit number from 300 to 850 that will decide your credit card reputation, and paying the credit card statement late will reduce it.
Increase Your Credit Card Score
To increase or improve your credit card score, you need to pay the statement before the closing date. If you lower the credit card utilization ratio and keep it below 30%, it will help you improve your credit score and maintain the FICO® score.
If your credit card utilization ratio is above 30%, it will drop your credit score by affecting your statement too. So keep it below this percentage as possible you can. Under the scoring model, 35% of your credit card score depends on your payment history made by you from the last closing date to now.
Paying The Credit Card Early
It would be good to pay the credit card statement before the due date, as the late payment will affect your credit card score significantly. To increase your credit card score, you need to pay the statement on time. So you must know what is your statement closing date to avert any extra charges.
What Will happen On the Closing Date?
Different things are calculated from your credit card and transferred to you on the closing date. It will usually occur before 21 days of the due date of payment. Various things that are calculated on the closing date are as follow,
- Monthly interest charge and minimum payment.
- Statement or bills are generated.
- Post these statements or bills on your inline account management page
- Your billing cycle is reported
- Then the billing cycle will be reported to national credit bureaus
- The credit card issuer will show these reports to the three national bureaus on different schedules, and they will calculate your data. All of these bureaus have your data identical, but the credit score from these bureaus differ from each other.
What Is Statement Closing Date: FAQs
What does the statement closing date mean?
Statement closing date is when your credit card statement is generated. In this statement, all of the billing information is mentioned made by you between the last closing date and the current closing date. This statement includes all the transactions you made between this time, like different charges and payments, and after its completion, it is posted to the account of whom the statement is to keep the user up to date.
Is the statement closing date the due date?
No, the statement closing date is not the due date as the closing date is the statement closing date is the end of your billing cycle of last days, while the due date is the last day when you have to make a minimum amount of payment through your debit card.
Should I pay off the statement balance or the current balance?
You should pay off the statement balance or current balance on the due date; it will help you avoid extra charges on your credit cards. Moreover, paying half or less statement balance than paying the full will also increase interest charges. Hence to avoid any interest charges, you should pay off the total statement balance.
What is the statement date on a credit card?
The statement date on the debit card is the statement closing date that is the last day of your billing cycle in which different things are calculated like,
- Monthly interest charges
- Minimum payments
The statement date is usually calculated 21 days before your due date.
Is it wrong to pay your credit card bill early?
No, it’s not a bad idea to your credit card bills before the due date, although it will help you increase your credit score regarding the debit amount. But paying it too early is also not a good idea as if you miss your next payment, they will count it as a late payment and apply charges on it.
What is the difference between the payment due date and the closing date?
Payment Due Date:
The payment due date is when some payment is due for charges made from the last billing cycle.
The closing date is when your credit card statement is generated and is the last day of the billing cycle in which finance charges are calculated.
Hence payment due date and the closing date is different from each other as they have different purpose.
How many days before the due date should I pay my credit card?
It is the best option to pay your credit card a week before your due date arrives as it will ensure your payment arrives on time without any problems; otherwise, paying it before one or two days may affect your earnings, and it may take time to come. So, always try to pay it early before the time.
How long is a billing cycle?
Depending on your credit card issuer, the billing cycle may vary from month to month, but usually, they last for up to 28 to 31 days. All the months have different numbers of days, so the billing cycle does not have the same duration.
What is the best day to pay credit card?
The best day to pay the credit card is before the due date. Suppose you are paying the credit card before the due date helps you increase your credit score. Whenever your debit-to-credit ratio begins to rise, it will be best for you to pay the credit card.
What happens if I only pay the statement the same?
If you pay the statement the same as it was, it will be helpful to you. Paying the total statement balance will help you get rid of interest and other charges as they are applied to those late from the due date.
Will I get charged interest if I pay the statement balance?
If you pay the statement balance before the due date, there will be no interest charged on your statement, and it will remain the same. But if you pay the statement balance after the due date, you will get charged interest on your account. Hence it is good to reimburse the statement balance early.
Why did I get charged interest on my credit card after paying it off?
They will only charge interest on your credit card if you haven’t paid the total balance at the end of the grace period. To avoid the charged interest on your credit card, it is essential to pay the entire balance; otherwise, they will charge the interest on half or no payment.
Hence to maintain or increase your credit card score and avoid any extra interest charges, you must know the statement closing date. It is not only to keep your credit card score, but it will also help you understand the basic terms, and you will be secure from any problem. Make sure to pay off your bill on time and complete payment for your reliability and ease so you’ll not bother too much with different issues.
I am Lavinia by name and a financial expert with a degree in finance from the University of Chicago. In my blog, I help people to educate by making wise choices regarding personal investment, basic banking, credit and debit card, business education, real estate, insurance, expenditures, etc.