Statement Balance vs. Current Balance: What’s the Difference + FAQs Answered

When you log into your credit card account, it may be a little confusing to see two different balances listed. There’s a statement balance and a current balance, but what do these terms mean and how are they different? Most importantly, which one do you need to pay by the due date? These are extremely common questions and this guide will give you the answers regarding your statement balance vs. current balance.

The statement balance is everything you charged during your last billing cycle. The current balance is the balance from the last billing cycle, plus anything you’ve charged since then. Learning about how the statement balance and current balance works, along with some special considerations and tips, can help you take control of your credit card and potentially boost your credit score.

Statement Balance vs. Current Balance

The statement balance and the current balance represent two time frames of your credit card’s activity. The statement balance is all of the charges within a designated billing cycle. The current balance is all the charges you’ve made within a designated billing cycle and beyond. You might think of current balance like a real-time update of your spending.

What Is a Statement Balance?

Your credit card’s statement balance is the amount of money you need to pay by the due date to avoid any fees or interest.

Each month your credit card company will generate your statement balance, then inform you of the total amount owed and the due date. Your statement balance will include all of the charges you’ve made to your credit card since your last payment.

Previously, credit card statements only existed in letter form. You’d receive a letter in the mail telling you how much your credit card bill was for the month. This letter was called the credit card statement, and informed the cardholder of the total amount they owed. Now your statement likely appears as a total in the credit card company’s mobile app.

By paying the statement balance in full, you will begin the next credit card billing cycle with a balance of $0.

What Is a Current Balance?

Your current balance is your credit card’s statement balance plus any additional charges you’ve made since the statement was created.

While you don’t owe the current balance, it gives you a preview of your upcoming credit card statement, so you can keep an eye on your spending.

For instance, if you have a $100 statement balance and then you charge $5 to your card, your current balance is $105. But you’d still only need to pay the statement balance of $100 by your next due date. The additional $5 represents the beginning of the upcoming month’s credit card bill, and won’t need to be paid until later.

How to Find Your Statement Balance and Current Balance

You can find both your statement balance and current balance inside your credit card app or on the credit card website. The first number you’ll be presented with is your statement balance, and if you select “make a payment” you’ll be presented with both the statement balance and current balance. Then you can choose which one you’d like to pay.

Why Are the Statement Balance and Current Balance Different?

The statement balance and the current balance are different because the statement balance only reflects charges made during your last billing cycle. The current statement includes all of the charges during the billing cycle, along with any charges made after that.

The current balance keeps you informed of your current rate of spending and prevents you from being surprised at the end of the month when your next statement balance is posted. If, for example, you noticed that your current balance was already double the statement balance a week into the new month, you’d know to cut down on your spending or reduce your credit card usage.

Should You Pay the Statement Balance or the Current Balance?

When confronted with these two different balances in your credit card app, it’s natural to feel a little confused. Just remember that you are only required to pay the statement balance. Paying the current balance is completely optional and means you’re pre-paying part of your credit card bill for next month.

So, when you’re deciding to pay your statement balance vs. current balance, your two options are:

1. Pay the statement balance to pay off your entire current credit card bill and avoid late fees, interest, and dings on your credit score. This also helps improve your credit health and utilization ratio.
2. Pay the current balance to pay off your entire current credit card bill and get a head start on your next bill.

Finally, if you aren’t sure which balance to pay, it can help to understand your billing cycle and how to manage it. A billing cycle for a credit card is the period of time between billings. This period is typically 30 days and can range from the first to the 30th of a month, or the 15th of one month to the 15th of the next. A grace period is the time that you are allowed to pay your statement balance without accruing interest, but varies by providers.

Depending on where you are in your billing cycle, your statement balance may vary. If your statement cycle has ended and you’ve made purchases since then, your current balance may be higher than your statement balance. This typically isn’t an issue if you pay your statement balance on time and avoid making only the minimum payment.

One way to manage your credit balance is by using automatic payments — essentially scheduling your payments to go out on a specific day each month. Some of the many benefits include avoiding late fees, improving your credit score (through timely and consistent payments), and improved security features. While automatic payments are generally a good thing, you need to be sure that you always have enough money in your checking account to avoid overdraft and late fees.

The Statement Balance and Your Credit Utilization Ratio

Your statement balance can actually impact your credit score. This is due to the credit utilization ratio, which compares how much you are charging to your credit card in relation to your credit limit. If your credit limit is $1,000 and you spend $400 each month, then your credit utilization ratio will be 40 percent. In general, the higher your credit utilization ratio is, the lower your credit score will be.

How Statement Balance vs. Current Balance Affect Your Credit Score

The credit utilization ratio makes up a third of your total credit score, so reducing your credit card spending in relation to the card’s limit can improve your credit score substantially. Credit bureaus will receive your statement balance each month and score it accordingly.

It is often recommended to keep your credit utilization ratio below 30 percent to help your credit score, but it’s increasingly being recommended to keep it below 10 percent.

You can improve your credit utilization ratio by doing any of the following:

• Reduce your total credit card spending
• Offset some charges that you would normally put on a credit card by paying with cash
• Determine your statement balance date and pay off part of the balance before it’s reported

The credit bureaus determine your credit utilization ratio by seeing your statement balance. If you pay off enough of your balance prior to receiving the statement balance to land in the 10 to 30 percent credit utilization range, from their perspective, you were there all along.

Managing Your Statement Balance vs. Current Balance

The difference between the statement balance and current balance brings us to some nagging questions about how they interact. Should you pay both balances? Why is one higher than the other? Which do you need to pay to avoid interest? Here are some answers.

The Bottom Line

Understanding the differences between the statement balance and current balance helps reduce confusion and allows you to have more control over your personal finances. By making payments prior to your statement balance, you can potentially improve your credit score by reducing your credit utilization ratio.

Whether you pay just the statement balance or get ahead by paying off the current balance is completely up to you. Either way, the most important thing is to avoid missing payments or making just the minimum payments, which will turn into late fees and interest added on top of your existing credit card debt.