What Is the Billing Cycle of a Credit Card?

What Is the Billing Cycle of a Credit Card?

The interval between billing statements for a credit card is known as a billing cycle. The billing cycle length varies by the credit card issuer, but it is usually around one month.

A credit card billing cycle's definition and an example

The time between credit card billings is known as the billing cycle. Your credit card issuer prepares your statement at the end of the billing cycle, and you have until the due date to make a credit card payment. Based on the credit card and the issuer, billing cycles typically range from 28 to 31 days. If you have a credit card with a 28-day billing cycle, for example, you can expect to be billed for any unpaid charges or fees that occur during that time.

The Workings of a Credit Card Billing Cycle

Although the issuer's credit card billing cycles differ, federal law requires them to be consistent. The days in your billing cycle can't differ more than four days from the regular day or the date on your statement, according to the Consumer Financial Protection Bureau (CFPB). A billing cycle, for example, could begin on the first of the month and end on the last day of the month, or it could run from the first Wednesday of one month to the first Wednesday of the following month. Any purchases, credits, fees, and finance charges made during your billing cycle are posted to your account and deducted or added to your balance. At the end of the billing cycle, you are billed for any unpaid charges or fees that occurred during the billing cycle. Your next billing statement will show any activity on your account after the billing cycle has ended. To determine your credit card billing cycle, look at your most recent credit card statement or log into your online account. Count the days between the start and end of your previous billing cycle if you need to calculate the number of days in your current billing cycle. Tip: Checking your online account in between billing statements can help you stay on top of your available credit and spot any unauthorized charges.

Dates of Payment

The due date for your credit card payment is usually 21 to 25 days after your billing cycle ends. The "grace period" is the time between the end of your billing cycle and your billing due date. You can usually avoid paying interest on your balance by paying it in full before the grace period expires. If you haven't paid your balance in full after your last billing cycle, transferred a balance, or taken out a cash advance, you may not be eligible for a grace period. Note: Your credit card due date is required by law to fall on the same day each month and has no bearing on your billing cycle's start and end dates. A report on your credit card account will be sent to at least one of the three major credit bureaus, Equifax, Experian, or TransUnion. Your credit report contains a summary of your account as well as information about how you manage your credit cards, such as payment history, credit limit, and monthly payments. Your credit card company will update your credit report at the end of the billing cycle, which also serves as the closing date for your account statement. The credit bureaus will be informed of your account status on the last day of your billing cycle. Pay off your credit card before the end of your billing cycle if you want your credit report to reflect that you have a zero balance. Otherwise, assuming you don't charge anything else to your card, it will take another cycle for a zero balance to appear on your credit report.

Important Points to Remember

  • The time between billing statements on a credit card is referred to as a billing cycle.
  • The average credit card billing cycle is 28 to 31 days.
  • According to federal law, your credit card billing cycles must be consistent, and your due date must be the same from month to month.
  • At the end of each billing cycle, your card issuer reports your credit card balance and other information.

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