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

So when you go to pay your credit card bill online or through a mobile app you are going to see usually the statement balance shown there and then you're going to see the current balance shown there and this can be a little confusing especially to people that maybe are getting credit cards for the first time 

You've got two different balances what's the difference between them which one are you supposed to pay so I'll give you the short answer and I'll go into a little more detail 

So the credit card statement balance is the amount you owed last time a bill was generated by the credit card company so your credit card company is going to send you a bill for a certain period of time and all the charges 

That was in that certain statement period are going to be on there if you had a balance before that they're going to add them on to that but your statement balance is going to be the balance you had on a certain statement date that is in the past 

Now your current balance is your balance today your balance currently and so since the statement date is in the past there is a time period in between the statement date and today's date 

When you still may have used the credit card more so the statement date you had a certain balance but if you've used the card more the current balance is probably going to be higher than that so 

In general, you can think of the current balance as being higher than the statement balance current balance equals statement balance plus new charges and perhaps interest if you've revolved a balance from month to month 

So if at the beginning of the last statement period you had no balance your card was completely paid off and you were looking today at the statement balance and the current balance and wondering which one do I have to pay to avoid any interest charges

I don't want to pay any interest I want to pay off everything you would only have to pay off the statement balance you would not have to pay off that current balance in order to avoid interest charges all right 

The current balance includes the statement balance plus any new charges the statement balance is part of the current balance which means they are not two different balances in terms of what you have to pay you don't have to pay the statement balance and the current

Example: 

So let's say you got a new credit card that had a zero balance obviously and you have had that card for 35 or 40 days or so you've been using it all along every two or three days

After the first 25 to 30 days your credit card company wants to get paid for the purchases that you have made during that first 25 to 30 days right 

So they have what they call a statement date sometimes people call it the cut date where they are going to cut things off and say everything that was purchased from this cut date and before 

We now want to get paid for at least we are going to bill for and you're either going to pay it all off or if you don't pay it all off we're going to end up charging you interest on it 

But you're going to get a bill that is going to be for everything from before that cut off date right but you still have the credit card even after that cut off date and you may have continued to use it 

After that cut off date so that means the amount of debt you actually have on that card after 35 or 40 days is probably going to be more than the debt you had on that card when they did the cutoff and they sent a bill out 

So they're sending you a bill for everything that first 25 to 30 days but you've continued to use the card and so you have a higher current balance so the statement balance is the balance on the date that 

They cut things off and they created a bill the current balance is the balance today every single thing that you have purchased probably up to this very minute 

So If the statement balance versus the current balance can be confusing why do the credit card companies show you both of them it used to actually be that when you only got paper bills you'd only see the statement balance you wouldn't even know what your current balance was 

Well there are a couple reasons for it and the first one is simply that it is a courtesy to show you what your current balance is if you aren't really aware necessarily in your head of how many more charges you have put on a credit card since the last time they sent that bill out to you it's a way for you to easily see 

Now the second reason they might show you that current balance is because if you are someone that has been revolving a balance meaning you haven't been paying off your complete bill every month and there are some interest charges on there 

Then not only is it beneficial to know what your statement balance was but it's good to know what your current balance is because you know that you are getting charged interest every single day at this point 

If you have put a lot more charges on there even if you pay off that complete statement balance you're still going to be getting charged interest every day 

Because you still have a balance that is going forward into the future and the way that the credit card calculations are done in terms of how interest is charged you are going to be paying on an average daily balance of what you have on your card so it is good for you to know what that current balance is.

The confusion between the statement balance and the current balance and is the fact that when you go to pay your bill online or through a bank's mobile app oftentimes

What is going to happen is you're going to make your payment and then you'll get a little message back from the bank saying thank you for your payment showing you you know how much the payment was maybe what bank account is coming out of etc.  

Then you'll go back to the main page of that account and you'll see that the statement balance and the current balance have not changed you just made a payment 

But when you go back you're going to see that those are still exactly the same and sometimes people see that and they panic a little bit they think 

Well I just made the payment why is it not showing up did I do something wrong should I have paid the current balance instead and in reality all that is happening there is that there is some lag time between when you make that payment and when it is actually credited to your account

The bank that issues that credit card is going to sort of giving you credit for having paid the bill but they're not actually going to apply it to your balance until they are sure that you actually have that money in the account that you are paying with so 

They are saying yes you made your payment on time but they're not actually going to change the numbers that you see until they are sure that you have that money and it has been transferred to them to pay on your balance 

So don't freak out come back in 24 hours or if you paid on the weekend come back on Monday at some point to see if that has changed it's not going to change oftentimes as soon as you make that payment there is going to be a lag.

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Also read: How credit card payments work 

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