To explain it simply statement balance vs current balance refers to the amount of money that you owe on your credit card. This is different from the current balance, which just refers to your available credit limit and represents how much money you have left to spend before reaching your credit limit.   

If a statement says your current balance is $1,000 but your statement balance says you owe $2,000, it doesn’t mean that someone has stolen $1,000 from you, it means interest charges and fees have been applied since the last statement balance was paid (billing cycle ended).  

What Exactly Is a Statement Balance?

Statement balance is the amount owed by you on your credit card statement. It’s a number that reflects only balances for which you have not yet paid and still does not include any interest charged on those balances.  

To calculate your statement balance, simply add up all of the charges listed on your current credit card statement. Then subtract any payments made during that billing cycle (typically marked as “Paid in full” or “Paid early with cashback bonus”). The resulting figure is what appears on your next and subsequent statements.  

As an example, let’s say you have two outstanding charges: $200 for purchases made last month and a $100 charge from three months ago that was added to this month’s bill because it wasn’t paid off by its original due date. Your total purchases were $300. However, after making this month’s payment of $100 plus interest (which we’ll assume totals 1% of each purchase), only $2 remains unpaid. Making your current balance zero at this point and so, we would say that these purchases were $300 worth but now show up as a remaining statement balance of $2 since they’re now paid off completely through your monthly payment plan with a credit card.  

Statement Balance vs. Current Balance: Which One Should You Pay?

You likely have an idea of what your credit card’s current balance is vs probably having no clear concept of what a statement balance is. The statement balance as opposed to the current balance on a credit card is a projection of what you owe, and the current balance is actually your debt. 

Your credit card company calculates your statement balance on the 1st of the month and sends you a bill. If all transactions since then have been paid in full, this will be zero, but if not, your remaining statement balance could be hundreds or even thousands of dollars.   

You want to pay that statement balance as soon as possible so that if there are any errors in computation or mistakes made by human beings, they can still investigate and correct them before interest charges accrue. When you pay off your current balance before it’s due without paying interest (which only happens if there are no late payments), then technically speaking nothing changed: Your credit card company still owes you money! But now instead of owing $100 on June 4th for example, they’re “owed” -$100 instead (i.e., your account’s current balance).  

Why Is Statement Balance Higher Than Current Balance?

A credit card statement balance is often higher than the current balance on a credit card. This happens because of interest, which is calculated daily but added to the balance only once per month. 

The amount of interest you pay depends on a number of factors:  

  • Credit card interest rate. If your credit card has an APR (annual percentage rate) of 15%, for example, then every time $1 is outstanding on your account for one year you pay $0.15 in interest per month ($0.15 ÷ 12 months = $0.01/month).  
  • Interest calculation method. Some banks calculate interest either daily or monthly. In case yours calculates it daily, then every day that passes adds another 1/365th (.01) to your total cost of borrowing money via credit cards over the course of a year, or 365 x 0 = 0 extra dollars paid above what was borrowed!  

How Do Your Balances Affect Your Credit Score?

Your credit score is a number that represents your overall ability to repay debt. It can be used by lenders to decide whether or not to lend money and at what interest rate.  

A low amount of available credit and a low balance are both considered signs of financial responsibility, as they indicate that you don’t overextend yourself with credit cards. However, there’s more to it than that:  

  • What you owe. You’ll want to keep an eye on how much you owe in relation to the limit on each card. The difference between this figure can be called “available credit.” The lower the balance relative to the limit, the better it looks for those scoring your finances through their eyes (or computers).  
  • How long you’ve had credit. Another key factor in calculating a score is how long someone has had open accounts. The longer this time period has been, the more responsible they look from a lender’s perspective. It’s all because this gives the lender an opportunity to see whether or not you have made payments consistently since opening your first card account(s).
  • The number of inquiries made. A high number of inquiries could mean someone is trying too hard or being too active with their money. Either way, this doesn’t send out positive signals about their abilities as consumers who may be prone to risk-taking behaviors like overspending or being late on bills.  

To summarize both current and statement balances affect your score, positively or negatively at the end of the month (billing cycle).  

Bottom Line

In conclusion, you can save money by paying your statement balance in full, every month. This will help you avoid interest charges and overspending which can add up quite a bit and cost you a lot of money. Don’t forget that you should always use your credit card responsibly and pay off the balance at the end of each billing cycle, or at least before it’s due.  

In case you find any of the information we provided on the statement vs current balance confusing in any way, don’t hesitate to reach out to a financial advisor to get the help you need. 


But I must explain to you how all this mistaken idea of denouncing pleasure and praising pain was born and I will give you a complete account of the system, and expound the actual teachings of the great explorer of the truth, the master-builder of human happiness. No one rejects, dislikes, or avoids pleasure itself, because it is pleasure, but because those who do not know how to pursue pleasure rationally encounter consequences that are extremely painful.

Leave A Reply