Statement Balance vs. Current Balance: What’s the Difference?

Credit card balances can be confusing for even the most skilled credit card users. There are two types of balances you’ll find associated with your card — statement balance and current balance. So what’s the difference between the two?

Your statement balance is the balance shown on your credit card statement and is what you owe from the previous billing cycle. Your current balance is the balance shown when you log in to your credit card account. It’s the full amount that you owe, including your statement balance and your current charges.

What is a statement balance?

A statement balance is the amount shown on your monthly credit card statement and includes all transactions made in one billing cycle. Examples of transactions can be purchases, interest, fees, balance transfers and cash advances. A billing cycle typically lasts 28 to 31 days and doesn’t necessarily align with the calendar month. The beginning of your billing cycle typically aligns with the date that your account was opened.

Your statement balance won’t include any new activity since your statement ended. For example, if your billing cycle starts on the first of the month and ends on the 31st, the amount owed on the 31st is your statement balance. Any transactions after that will appear on your next statement. If you’ve carried over any debt from the previous month, that amount plus any interest accrued will also appear on your statement balance. Once your credit card statement is generated, it won’t change again until the billing cycle closes and you start a new one.

Example

For example, let’s say you started your billing cycle with a credit card balance of $700. Then, you spent $500 on purchases and other expenses during your billing cycle and accrued $20 in interest. You also made one credit card payment of $200. The statement balance that would appear on your credit card statement at the end of your billing cycle would be $1,020.

$700 balance + $500 purchases + $20 interest – $200 payment = $1,020 statement balance

What is a current balance?

Your current balance is the full amount that you currently owe, including the unpaid balance from your last statement — if any — and new charges posted to your account for the current billing period. It’s the best representation of what you owe and how much credit you have available at any given time.

Example

For example, let’s say your last statement balance was $1,020 and your total credit limit is $3,000. Before the end of your last billing cycle you paid $400 of your statement balance, but were charged $20 in interest from the remaining balance. You’ve also spent $200 in new purchases and expenses this billing cycle.

$1,020 statement balance – $400 payment + $20 interest + $200 purchases = $840 current balance

$3,000 credit limit – $840 current balance = $2,160 total credit currently available

Unlike your statement balance, your current balance will fluctuate throughout your billing cycle as new purchases and payments are posted. You’ll see this number when you log into your account to check your balance, but pending transactions may not show right away.

Why is my statement balance more than my current balance?

There’s a chance that your statement balance is more than your current balance if you’ve made payments on your card after the billing cycle ends, but haven’t made any additional purchases.

If you haven’t made any payments and have made additional purchases since your billing cycle ended, your current balance will likely be more than your statement balance. These two numbers could also be the same if you made purchases during your billing cycle but didn’t make any payments.

Example

For example, if your balance was $2,000 at the end of your billing cycle, but you made a $1,500 payment the next day, your statement balance would be $2,000 and your current balance would be $500.

Which balance should you pay?

Deciding which balance to pay depends on your financial goals and situation. You can choose to pay any balance that works best for you. But, you should pay at least the minimum amount due on time to avoid late fees and keep your credit score in good standing.

Paying your balance in full each month is the best way to keep your balance at $0 and free up credit. But if you’re unable to pay your current balance, paying your statement balance is the next best option to avoid paying interest.

Tip

To help pay your statement balance on time, try setting up automatic payments with your issuer.

When do you get charged interest?

Most credit cards offer a grace period following your statement closing date and up to your due date. If you pay your full statement balance by the due date, all the interest for the billing period is waived. However, interest will be charged on any balance remaining after the due date.

If you do a balance transfer or a cash advance, you may also see interest immediately, even if you’ve paid the full statement balance.

0% APR

Some cards offer a 0% APR period that can help you avoid interest for a specific period on balance transfers, purchases, or both. For example, the Wells Fargo Reflect^® Card offers a 0% intro APR for 21 months from account opening on purchases. Then, a 17.49%, 23.99%, or 29.24% Variable APR applies.

How do your balances affect your credit score?

Your credit card balance can affect your credit score in a few ways. Your payment history makes up 35% of your credit score, which is why you should at least make minimum payments on time.

Your credit utilization ratio makes up another 30% of your credit score. This is the amount of debt you have compared to your total credit limit for all combined accounts. We recommend that you keep your credit utilization ratio below 30% to avoid hurting your credit score.

For example, if you have $10,000 of available credit on your credit card, but have a $2,000 balance, you’d be at a 20% credit utilization ratio. But, if you have $10,000 of available credit and a $5,000 balance, you’d be at 50%, which may hurt your credit score.

Want to keep up with your credit score? Sign up for LendingTree Spring to get your free credit score.

The information related to the Wells Fargo Reflect^® Card has been collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.