Statement Balance vs. Current Balance: What’s the Difference on Your Credit Card?

Every month, you’ll receive a credit card statement for each card you hold, and one of the terms that will always appear is called a statement balance, represented as a dollar amount.

But another figure — the current balance — will also be featured. (It's sometimes referred to as an "outstanding balance.") And it may or may not be the same dollar amount, depending on your card usage and payments.

Here's the difference between your credit card statement balance and current balance.

» LEARN: How to read your credit card statement

What is a statement balance?

Issuers are required by law to provide monthly statements to their cardholders. One statement lists all the activity in one billing cycle, which is usually a period of 28 to 31 days. After the last day of the billing cycle, also known as the credit card closing date, the issuer tallies up all the purchases charged to the card, all cash advances taken from the card, and all transferred balances added to the card in the cycle.

The statement balance is the total of all transactions minus any payments you made during that billing cycle.

Here’s an example resulting in a statement balance of $4,250:

• You charged $1,000 worth of various expenses throughout the billing cycle to your credit card.

• You completed a $5,000 balance transfer to that same credit card. Your card assesses a 5% balance transfer fee on the loan amount, adding $250 to your credit card’s ledger.

• You made a $2,000 payment toward the credit card around the middle of the billing cycle.

$6,250 in total expenses minus a $2,000 payment equals a statement balance of $4,250.

What is a current balance?

As the name suggests, a current balance on a credit card refers to the total amount owed on the day you check your account. Thus, the current balance may be a more up-to-date reflection of your debt than the statement balance is.

The statement balance and current balance can be the same amount — or not.

When the statement balance and current balance are the same

Say you charged $1,000 in expenses throughout the billing cycle and didn’t make any payments in that same time period. Your statement balance would be $1,000.

Let’s also imagine you don’t use the credit card for the next two weeks and you don’t submit any payments, either. When you log in to your credit card account at the end of those two weeks, you’d see a current balance of $1,000 — the same amount as the statement balance.

When the statement balance and current balance are different

For this example, we’ll start at the same hypothetical place of $1,000 in expenses for the entire billing cycle. However, in this scenario, let’s say you made a $500 payment. When the credit card statement closes, you’ll have a statement balance of $500.

Then, after the billing cycle ends, you use your card to pay for groceries, a medical bill and the month’s rent for a total of $2,000. When you log in to your credit card account, your current balance would be $2,500, which is exactly $2,000 more than the statement balance.

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Should you pay the statement balance or current balance?

Either option allows you to avoid paying interest, and here's why.

Interest charges are assessed only if you don’t pay the credit card statement balance in full by the due date. When you pay at least that much, a grace period goes into effect for the following billing cycle, and you won't owe interest on any new purchases you make until the due date for that next billing cycle.

So your strategy depends on your preference:

• Paying the current balance fully zeroes out your debt. In one fell swoop, you’ll pay off whatever your statement balance was plus any extra charges you made since the previous monthly statement was issued. On the plus side, you've covered all your expenses, and your credit card's interest rate never becomes a factor. On the minus side, you may find yourself less liquid in the short term. After all, in the example above, you've immediately shelled out $2,500 instead of $500.

• Paying the statement balance lets you "float" charges. Paying only the statement balance still lets you dodge interest until the next billing cycle. On the plus side, you keep more cash on hand and have more time to finance your purchases, thanks to your grace period. On the minus side, in the example above, you'll have a $2,000 bill coming due eventually, and that's assuming you don't make any new charges with the card before then. So this method, too, requires some budgeting and care.