Skip to content
Download Consolidated Credit's Free Debt Relief Guide

Statement balance vs current balance: What’s the difference and why does it matter?

Each month credit card companies send out your credit card statement. This statement has a balance owing which is the statement balance. By checking online or calling in, you will access your current balance. These two different balances can be confusing. Why have two balances? What is the difference? What do I have to pay? When do I have to pay it by? Keep reading for these answers. The Government of Canada offers additional credit card education.

What is a statement balance?

A statement balance is a total amount you owe at the end of a billing cycle. Banks and creditors send a monthly bill with all the transactions from the period on it. Included on the bill are a statement balance, a due date, and a minimum payment. Your statement balance will total all your transactions for the month. Including any remaining balance from your last statement. To avoid interest, you will want to pay the statement balance by the due date. To avoid damaging your credit score, you should always pay on time and in full. At the very least, you should make the minimum payment each month.

Do you have a lot of credit card debt? We can help with debt consolidation. Call us today.

Why is my statement balance higher than my current balance?

Statement balances can be higher than current balances. A current balance is a live balance of all transactions to date. These transactions can include payments made after you received your monthly statement. In this case, you’d have a higher statement balance. Given that you didn’t incur significant transactions following the statement date. If this was the case, your current balance can be higher than your statement balance.

For example, let’s say your credit card bill balance on October 18th is $2,500. Then you make a purchase on October 19th for $600. Your current balance would be $3,100. Then make a payment of $1,000 on October 20th. Your current balance would be $2,100 and your statement balance would be $2,500.

To summarize, your current balance is your balance right now, all factors considered. Your statement balance is the sum of all transactions from a billing period, usually a month. Because they reflect different periods of time, the two balances can vary. 

Which balance should you pay?

Pay off Your Statement Balance to Avoid Interest Charges

After a credit card company issues your latest statement, you have a grace period on interest. This grace period varies by lender and agreements but is usually 21 to 30 days. If you pay the statement balance in full before the grace period is up, you avoid interest. The grace period only applies to the purchases for the month. Any balance carried over from another month will have interest applied. Interest is quite high and can add up. Always paying your statement balance in full each month will help you avoid these extra fees. Here is more information on credit card statements.

Use AutoPay to Avoid Interest Charges

To keep things simple, it is wise to set up AutoPay to avoid interest. It can be simple to figure out how much you use your credit card each month. Setup AutoPay with your bank for that amount. It makes sure you always make your payments on time and in full. This keeps your credit score strong. It also helps avoid a high-interest rate. Make sure you have AutoPay set up before the due date of your statement each month.

What is a current balance?

Current balances are live, outstanding balance, which includes recent payments and purchases. To get this value, check online or call your credit company. You do not need to pay current balances in full to avoid interest. It is just a snapshot of your current credit card activity. However, if you’re closing your credit card or switching to a new bank, you may need to pay the current balance.

How does current balance affect your credit utilization ratio?

Your current balance is not reported to credit bureaus. Your statement balance is the value sent for credit score reporting. Looking at your current balance could help you make payments in advance. The goal is to keep your credit utilization below 30%. Credit utilization is how much of your allowed credit you are using each month. Credit bureaus prefer individuals who use no more than 30% of their credit available to them. Having a credit utilization above 30% can negatively affect your credit score.

How do your balances affect your credit score?

Your statement balances go-to credit bureaus and reflect in credit reports. Credit reporting happens once a month by credit card issuers. Using more than 30% of the credit you have available could negatively affect your score. Use your current balance to monitor your credit utilization. Statement balances will be no more than 30% of your credit utilization. Paying your statement balance in full is the best way to a build strong credit score. Try to only carry low statement balances month to month. If you need to build your credit score, consider secured credit cards. Here is more information on credit scores and reports.

Exceptions – Cash Advances

Cash advances incur interest the minute they happen. There is no grace period to avoid interest. Cash advances also have different and higher interest charges than purchases. You should only consider cash advances when you’ve exhausted all other options. When you make a cash advance you will want to pay the current balance to minimize interest.

What is Important?

Statement balances and current balances both hold important information. Paying statement balances will help avoid interest and maintain good credit. Credit issuers report to credit bureaus. Watch your current balance and keep it under the 30% total credit limit. This will prevent high statement balances from being reported to credit bureaus. These are small differences but can have huge impacts on credit scores. If you are struggling with debt or need help understanding your finances, we are here to help. Credit cards have some huge advantages and disadvantages. Connect with Consolidated Credit Counselling Services today.

Was this article helpful?

What is your total credit card debt amount?

Provide a few details about yourself.

##first_name##, here are your next steps...

Get a clear picture of your spending vs. your income. Begin your online budget and financial analysis now by clicking the button above.

Our experts are here to help you understand your options and reach your goals. After you complete the easy-to-use online budget, one of our trained counsellors will reach out to you and provide recommendations.

Everything shared is 100% confidential and secure.

I understand and agree that by choosing “Start your online budget now”, I am voluntarily providing certain personal financial information in order to educate myself as to my current financial position. I understand that this budget tool is educational in nature, and that none of the information received in the form of a budget constitutes financial advice, nor does it constitute a counselling session. I understand and agree that the budget depends on the information I input into the fields, and that Company does not represent or guarantee the accuracy of the budget. I understand that this tool may collect information and should I choose not to provide such information, I am not to proceed further. If I choose to abandon the tool midway through the process, I understand that the information will not be maintained and I would be required to start providing the information from the beginning. Company disclaims all warranties associated with the budget tool herein. I understand and agree that Company may use the contact information provided herein to contact me through various means of communications, including automated messages, and that I expressly consent to receive these messages.

Consolidated Credit Counseling Services of Canada Inc BBB accredited business profile