Credit Card Statement Balance Vs Current Balance

Bank statements and transaction histories aren’t always easy to interpret. This is especially true when comparing your statement vs current balance on your credit card.

Your statement contains the closing balance, the minimum payment due, and the available credit. Then, when you log into your online banking account, you’ll see the current balance, available funds, and pending transactions.

It’s important to understand the purpose of each to help you better manage your credit card debt.

What is the statement balance?

The statement balance, also known as the closing balance, is the total of all the credit card charges and transactions, including what was previously owed, minus any payments you made during a billing cycle. Credit card companies must provide statements to cardholders each billing cycle, usually 30 days.

Here’s an example resulting in a statement balance of $1,860:

You charged $800 worth of various expenses throughout the billing cycle to your credit card.
You completed a $2,000 balance transfer to that same credit card. Your card assesses a 3% balance transfer fee on the loan amount, adding $60 to your credit card’s ledger.
You made a $1,000 payment toward the credit card around the middle of the billing cycle.

$2,860 of total expenses minus a $1,000 payment equals a statement balance of $1,860.

Credit card companies calculate your minimum repayment from the total statement balance. So, if your minimum repayment equals 2.5% of your statement balance, you owe $71.50 based on the above example.

🤓 Nerdy Tip

A billing cycle may not align with the calendar month. It often begins the same day your bank opens the credit card account.

What is the current balance?

The current balance (or account balance) is the total amount owed to date, including the statement balance and any recent charges.

For example, if your latest statement balance is $1,500 but you’ve spent another $500 on the credit card, your current balance will be $2,000.

What about available funds?

Cross-check your current balance owed with your available funds. Credit card transactions take time to process and to reflect or show up in your current balance. However, transactions are deducted immediately from your available funds.

When to refer to statement vs. current balance on a credit card

Refer to the statement balance (in your statement) when:

paying the minimum monthly amount due to keep your account in good shape
paying the total statement balance to avoid interest charges.

Refer to the current balance (in your online banking) when:

checking your credit card debt reflected in real-time
keeping track of spending, available funds, and your credit limit
reviewing pending transactions, managing cash flow and avoiding surprises.

» MORE: Credit card fees and charges to know and avoid

Tips for managing credit card balances

The best way to keep your credit account in good shape is to familiarise yourself with your statements. It’s easy to skip them and go straight to online banking for your most recent transaction history, but it’s better practice to carefully read through your statements.

Check your statement every month

Know your statement cycle length and dates, check repayment due dates, see how interest is calculated, and review the transaction list.

Set up alerts for minimum repayment due dates

You must pay the minimum payment to avoid a missed payment fee and damage to your credit score. You can set up notifications for upcoming payments (through the bank and manual reminders) and organise automatic repayments from your debit card.

Check your current balance online daily

Staying on top of your current balance is important, even if you make the minimum repayments. Check your current balance and available funds regularly to avoid missing pending transactions or going over your credit limit and potentially getting an overlimit fee.

Pay the statement balance in full to avoid interest

Repay the total statement balance before the due date whenever possible so you don’t incur interest. The only way to avoid interest is to pay the total statement balance off in full, not just the minimum amount due.

By doing this, you can enjoy the flexibility of using a credit card, earn points (if you have a rewards card) and avoid interest.

Make extra payments to reduce debt

Making additional payments toward your current balance can help reduce your overall credit debt. Even if you pay off your statement balance in full, you might still have outstanding debt if you continue to use your credit card after the statement cycle period.

For example, if your statement balance is $1,500 with a statement cycle 25 June to 25 July, any purchases after 25 July will still be owed. Refer to your current account balance to see your debt and budget accordingly.

You can transfer small repayments when you have extra money or set up automatic weekly repayments. Little payments of $20, $30 or $50 can make a big difference in paying down your debt.

As with all aspects of personal finance, self-education is key to empowerment.

You might overpay or underpay if you pay the current balance but not the statement balance. You’re better off referring to the minimum balance outlined in your statement so that you keep your account in good shape.

If your statement closing balance is $1,500 but your current balance is $2,000, you technically owe $2,000.
If your statement closing balance is $1,500 but your current balance is $500, you technically owe $500.

Remember, your statement always has a lag, as it reflects the previous month.

Credit card transactions take time to process and reflect in your account balance. While a transaction is pending, it will be deducted from your available funds. Still, it can take two business days for the transaction to reflect in your account balance. Always refer to the available funds.

Yes, you can pay more than the minimum payment due in your statement. Refer to your current account balance in your online banking to see how much you owe. You can pay the total amount if your minimum payment due is $50, but your account balance is $1,000. You can always pay the minimum amount or anything up to the total amount owed.