How to understand credit card billing cycle

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credit card billing cycle

Credit can be complex; you can easily find yourself in debt if you don’t understand your credit card billing cycle and due date. In this blog post, I will be breaking down the dates you absolutely need to understand to make the most of your credit and ultimately maximize your credit score.



Definition of credit card billing cycle 

Each credit card billing cycle varies from issuer to issuer and depends on the credit card. Typically, a billing cycle can be anywhere from 28-31 days. The charges made during the credit card billing cycle will post and either be added or subtracted from the balance. At the end of each cycle, you are responsible for paying anything outstanding. All other activity made after the billing cycle ends will reflect on the next billing statement. Federal law requires the due date to be consistent. 



According to the Consumer Financial Protection Bureau (CFPB) the days in your billing cycle must be within 4 days of the regular date of your summary. This is to ensure that your due date is the same month over month. Therefore, a billing cycle can start on the first day of the month and end on the last day of the month. You’re able to figure out how long your credit card billing cycle is by counting the number of days between the beginning and end of your last billing cycle. 




Why it is important to know your credit card billing cycle 

Each month, your credit card issuer will report your credit card account to at least one of the three major credit bureaus, Equifax, Transunion, and Experian. These companies are responsible for determining your FICO credit score. It’s important to know your credit card billing cycle so you can pay off any charges before the statement closing due date. This way your credit report shows you have a zero balance.



There is a time frame referred to as a grace period where you have around 21-25 days after your credit card billing cycle ends to make a payment. Paying off any charges before the grace period means avoiding paying interest and helps maintain a healthy credit score. Also note, your credit card payment due date is required by law to be the same day each month.  




What if I can’t keep up with my current credit card billing cycle

If you find yourself struggling to make payments on time you should contact your card issuer. You should be able to change your due date which will shift your billing cycle. The same 28–31-day period time will apply but aligning your due date around days you get paid can certainly help. Though keep in mind many creditors only let your make these changes once every 90 days so be strategic before making this ask.