What does the credit card billing cycle mean?

2 min read

In simple terms, a billing cycle refers to the period for which your credit card bill is generated. All your transactions made during the billing cycle reflect in your credit card statement.

How does a credit card billing cycle work?

Billing cycles vary from month to month and range from 28 to 31 days, depending on the credit card and the issuer. If your card statement is generated on the 10th of every month, the billing cycle will start from the 11th of each month till the 10th of the following month. Any transaction that is made after the billing cycle reflects in the following month’s statement.

What does payment due date mean?

At the end of the billing cycle, your statement is generated by your credit card issuer and you have time until your due date to make the payment. The payment due date is when you need to pay the outstanding amount on your credit card every month. Usually, the due date is set 21-25 days after the bill is generated.

Can you change the dates of a billing cycle?

It is not possible for credit cardholders to change the due date of payment, as billing cycles are determined by the credit card issuer. However, the credit card cycle can be changed as per the card holder’s preference by contacting the credit card issuer.

How does the credit card billing cycle affect your credit score?

Ever wondered what a credit card billing cycle is? Finding the answer to this question is important, as this indirectly affects your credit score in the following ways:

  • Your credit card issuer is required to share your billing details with the credit bureaus every few months. If you have missed or made late payments, your fiscal reliability is hit. This directly affects your credit score.
  • Regularly exceeding your monthly credit limit suggests poor financial management and presents you as a liability to your creditors.
  • Your credit score is severely affected if you're unable to pay the minimum amount due by the closing date of a billing cycle.
  • Alternatively, paying your credit card dues on time helps build your credit profile and makes you creditworthy.

Thus, if you keep missing payment deadlines, your credit score will present you as a financial liability, and your prospects of getting loans in the future will be severely affected. So it's important to understand your billing cycle and strictly adhere to your statement period while making payments.

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