How to Pay Your Credit Card the Right Way

Pay Your Credit Card the Right Way

Paying your credit card seems like it would be pretty straight-forward, right? Well then why does your credit card statement come with so many different and confusing balances? We’re about to break down exactly what each balance is, how paying each balance will affect you, and which balance is best to pay.

What are the Different Balances on Your Credit Card Statement?

Every month, you will receive a credit card statement that will highlight your different balances and minimum payment. The billing cycle will be between 28 to 32 days depending on your credit card provider and depending on the month.

What is the Minimum Balance?

Making the minimum payment should be a last resort. If you run into some financial issues, you might be okay making the minimum payment for a few months, but you should try to get back on track as soon as possible. Making the minimum payment is better than not making any payment at all.

What is the Statement Balance?

Your statement balance is the total of all of your charges during the previous billing plus any outstanding balance. Paying the statement balance will help you avoid accruing any interest because you are technically not carrying over any of your outstanding balance into the next billing cycle.

What is the Current Balance?

The current balance is made up of your statement balance and any purchases you have made since your billing cycle ended. It is the most up-to-date balance on your credit card. Many people also opt to pay the current balance because it completely resets your outstanding credit card debt.

How to Pay Your Credit Card the Right Way

Most experts will recommend that you pay the current balance every time if you can afford to do so. Many people will also recommend that you pay off your bill as soon as you get it rather than waiting until the due date so that you stay on top of your payments.

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