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When you buy with credit, it’s easy to forget that you’re paying for that item with money that doesn’t belong to you. It’s like taking out a short-term loan to make a purchase. If you’re putting charges on your credit card throughout the month, the value of that loan — your “current balance” — fluctuates.

You may notice there are other numbers on your credit card statement, such as your statement balance. Wait a minute, you may ask, What’s the difference? Here we’ll discuss the meaning of statement balance and current balance, along with a few tips for paying down your credit cards.

Statement Balance vs Current Balance

Each credit card issuer may have a slightly different method of presenting and even calculating the numbers on your monthly statement and online portal. Still, you will likely see one number called the statement balance and another called the current balance.

The statement balance means all transactions during a designated period, called a billing cycle. If a billing cycle covers one month and starts on the 15th of each month, this statement balance will include all of the activity on an account between, say, January 15 and February 15, in addition to any previously unpaid balances. Until the close of the next billing cycle, the statement balance will remain unchanged.

Your current balance means the running total of all transactions on your account. It changes every time you swipe your card to pick up Chinese takeout or return a T-shirt that didn’t fit right.

To understand the interplay between the statement balance vs. the current balance, consider this. On February 15, the statement balance is $1,000, meaning that the total charges between January 15 and February 15 add up to $1,000. Two days later, you make a $50 charge to the card. Your current balance will reflect $1,050 while the statement balance remains the same.

In this case, the current balance is higher than the statement balance. The reverse can also be true, and the current balance can potentially reflect a smaller number than the statement balance.

Recommended: Personal Loan vs. Credit Cards

What to Know About Paying Off Your Credit Card

As each billing cycle closes, you will be provided with a statement balance. You will also likely be provided with a due date. At the time you make a payment, you may decide to pay off the statement balance, the current balance, the minimum payment, or some other amount of your choosing.

Recommended: Credit Card Closing Date vs Due Date

Paying the Statement Balance

If you regularly pay your statement balance in full, by its due date, you likely won’t be subject to any interest charges. Most credit card companies charge interest only on any amount of the statement balance that is not paid off in full.

The period between your statement date and the due date is called the grace period. During this period, you may not accumulate interest on any balances. It’s worth mentioning that not every credit card has a grace period. It’s also possible to lose a grace period by missing payments or making them late. If you have any questions about whether your card has a grace period, contact your credit card company.

Paying the Current Balance

If you’re using your credit card regularly, it is possible that you will use your card during the grace period. This will increase your current balance. At the time you make your payment, you will likely have the option to pay the full current balance.

If you have a grace period, paying the current balance is not necessary in order to avoid interest payments. But paying your current balance in full by the due date can have other benefits. For example, this move could improve your credit utilization ratio, which is factored into credit scores.

Paying the Minimum Monthly Payment

Next, you can pay just the minimum monthly payment. Generally, this is the lowest possible amount that you can pay each month while remaining in good standing with your credit card company — it is also the most expensive. Typically, the minimum payment will be an amount that covers the interest accrued during the billing cycle and some of the principal balance.

Making only the minimum payments is a slow and expensive way to pay down credit card debt. To understand how much you’re paying in interest, you can use a credit card interest calculator. Although minimum monthly payments are not a fast way to get rid of credit card debt, making them is important. Otherwise, you risk being dinged with late fees.

Missing or making a payment late can also have a negative impact on your credit score.
So, if the minimum payment is all you can swing right now, it’s okay. Just avoid additional charges on your card.

Making a Payment of Your Choice

Your last option is to make payments that are larger than the minimum monthly payment but are not equal to the statement balance or the current balance. That’s okay, too. You’ll potentially be charged interest on remaining balances, but you’re likely getting closer to paying them off. Keep working on getting those balances lowered. A good goal is to pay off your balance in full each month.

Your Credit Utilization Ratio

The balance you currently carry on your credit card can impact your credit utilization ratio. Credit utilization measures how much of your available credit you’re using at any given time. Credit utilization is one of a handful of measures that are used to determine your credit score — and it has a big impact. Credit utilization can make up 30% of your overall score, according to FICO® Score.

Not every credit card reports account balances to the consumer credit bureaus in the same way or on the same day. Also, the reported number is not necessarily the statement balance. It could be the current balance on your card, pulled at any time throughout the billing cycle. Again, it may be worth checking with your credit card issuer to find out more. If your issuer reports current balances instead of statement balances, asking them which day of the month they report on could be helpful.

Sometimes, the lower your credit card utilization is, the better your credit score. While you may feel in more control to know which day of the month that your credit balance is reported to the credit bureaus, it may be an even better move for your general financial health to practice maintaining low credit utilization all or most of the time.

If you are worried about your credit utilization rate being too high during any point throughout the month, you can make an additional payment. You don’t have to wait until your billing cycle due date to reduce the current balance on your card.

According to Experian, one of the credit reporting agencies, keeping your current balance below 30% of your total credit limit is ideal. For example, if you have two credit cards, each with a $5,000 limit, you have a total credit limit of $10,000. To keep your utilization below 30%, you’ll want to maintain a balance of less than $3,000.

Recommended: When Credit Card Companies Report to Credit Bureaus

3 Tips for Managing Your Credit Card Balance

If you’re struggling to juggle multiple credit cards and make all of your payments, here are some tips that may help.

1. Organizing Your Debt

A great first step to getting a handle on your debt is to organize it. Try listing each source of debt, along with the monthly payments, interest rates, and due dates. It may be helpful to keep this list readily available and updated. Another option is to use software that aggregates all of your finances, such as your credit card balances and payments, bank balances, and other monthly bills. Check out SoFi Relay if you haven’t already.

Whether you use existing software or your own calendar system, keep in mind that staying on top of your due dates and making all of your minimum payments on time is one of the best ways to stay on track.

You can also ask your credit card providers to change your due dates so that they’re all due on the same day. Pick something easy to remember, such as the first of the month.

2. Making All Minimum Payments, But Picking One Card to Focus On

While you’re making at least the minimum payments on all your cards, pick one to focus on first. There are two versions of this debt repayment plan: the Debt Avalanche and the Debt Snowball.

With the Avalanche method, you attack the card with the highest interest rate first. With the Snowball method, you go after the card with the lowest balance. The former strategy makes the most sense from a mathematical standpoint, but the latter may give you a better psychological boost.

If and when you can, apply extra payments to the card’s balance that you’re hoping to eliminate. Once you’ve paid off one card, you can move to the next. Ultimately, you’re trying to get to a place where you’re paying off your balance in full each month.

3. Cutting up Your Cards

Whether you do this literally or not, a moratorium on your credit card spending can be a great strategy. If you are consistently running a balance that you cannot pay off in full, you may want to consider ways to avoid adding on more debt.

A word of warning: Don’t be tempted to cancel all your cards. This can negatively affect your credit score. However, if you feel you really have too many credit cards to manage — say, more than three or four — cancel the newest credit card first. This will ensure your credit history length is unaffected.

The Takeaway

Your credit card statement balance is the sum of all your charges and refunds during a billing cycle (usually a month), plus any previous remaining balance. It changes monthly with each statement. Your current balance is updated almost immediately every time you make a purchase. It is the sum of all charges to date during a billing cycle, any previous remaining balance, and any charges during the grace period. Whenever you can, pay off the full statement balance to avoid interest charges.

Trying to pay off credit card debt? Taking out a personal loan can consolidate all of your credit card balances. You’ll have only one monthly payment to make, a low interest rate, and no fee options. Plus, there is an easy online application and access to live customer support seven days a week.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

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Credit card debt can go from zero to thousands with one quick swipe. Or it can build slowly like rising water — a nice dinner here, some retail therapy there. Before you know it, your balance is uncomfortably high. You’re not alone. Almost half of American households carry credit card debt. Of those consumers, the average balance is $5,315.

If you’ve vowed to pay off your credit card balance, you’re making a smart financial move. You’ll save money on interest, boost your credit history, and position yourself to achieve other financial goals. Here, we reveal the top tips and strategies for getting it done, from the Snowball strategy to hardship plans to the boring-but-effective debt-focused budget.

What Is a Realistic Payoff Schedule?

If you’ve been carrying a balance on one or more cards, it may take longer than you’d like to pay off the debt. Determine how long you need to become debt-free while still covering your monthly bills comfortably. A longer payoff term will allow you to continue to save and invest while paying down debt. But a shorter payoff term can save you a considerable amount in interest.

If there’s no scenario where you can cover your living expenses and pay off your credit card debt in five years, these strategies may not be enough. In that case, it may be time to consider applying for credit card debt forgiveness.

7 Credit Card Payoff Strategies and Tips

There are numerous ways to tackle debt and pay off credit cards. The approaches below will work best when you mix and match several to create your own custom debt-payoff plan.

1. Create a Debt-Focused Budget

Achieving financial goals always starts with a budget. This exercise is designed to help you discover extra cash you can put toward your credit card bill.

First, make a list of your monthly bills. Along with your rent payment, phone, gas, and other required living expenses, include your credit card payment. You can leave the amount blank for now. This is your “Needs” column.

Now look at your “Wants.” These are things that you can survive without — restaurants, new clothes, gym membership — but that often make life better. Which items can you do without temporarily so you can put their cost toward your credit card bill?

It’s OK if your budget isn’t the same from month to month — flexibility is good. While you’re at it, look ahead for unavoidable big purchases (that upcoming destination wedding) and leave room for unexpected expenses. Your credit card payment may be lower some months to accommodate these other costs. Just always pay at least the minimum payment.

Your new budget should prioritize your credit card payment on par with other bills, and above nonessential treats. One way to make budgeting easier on yourself is to download an app like SoFi Relay, which pulls all of your financial information into one place.

2. Zero Interest Credit Card

The frustrating thing about credit cards is how interest can take up more and more of your balance. Zero-interest credit cards, also known as 0% APR cards, allow card holders to make payments with no interest on transfers and purchases for a set period of time. The promotional period on a new credit card can last as long as 18 billing cycles, long enough to make a large dent in the card’s principal balance.

Consolidating your credit card debt on one zero-interest card serves to simplify your monthly bills while also saving you money on interest payments. The key here, of course, is to avoid racking up even more credit card debt.

One drawback to these cards is that you often need a FICO Score of 690 or above to qualify. And once the promo period expires, the interest rate can climb to 27% or higher. In an ideal world, you’ll want to achieve your payoff goal before the rate rises.

A credit card interest calculator can give you an idea of how much your current interest rate affects your total balance.

3. The Snowball, The Avalanche, and The Snowflake

The Snowball and Avalanche debt repayment strategies take slightly different approaches to paying down debt. Both involve maintaining the minimum payment on all but one card.

The Debt Snowball method focuses on the debt with the lowest balance first, regardless of interest rate, putting extra toward that payment each month until it’s paid off.

Then, that entire monthly payment is added to the next payment — on top of the minimum you were already paying. Rinse and repeat with the next card. It’s easy to see how this method can quickly get the snowball rolling.

The Debt Avalanche is based on the same philosophy but targets the highest-interest payment first. Getting out from under the highest debt can save a lot of money in the long run. Just like the Snowball method, applying that entire payment to the next-highest-interest debt can lead to quick results.

The third snow-related strategy, the Debt Snowflake, emphasizes putting every extra scrap of cash toward debt repayment. If you have extra money to throw at your debt, even $20, that can still make a difference in your overall amount owed.

4. Make More Money

Sure, increasing your income is easier said than done. But if you have the time to spare, it can make paying down debt a whole lot easier. Here are the top ways that people can bring in more cash:

•   Start a side hustle (or monetize and existing hobby)

•   Get a part-time job (on top of your current job). Two shifts a week can help you bring in another $500 to $1,000 per month.

•   Sell your stuff. It’s easier than ever to resell clothes, books, old electronics, and jewelry.

•   Negotiate a raise. Labor shortages have given workers extra leverage to ask for more.

5. Negotiate with Your Credit Card Company

If your large credit card balance is the result of unemployment, medical bills (yours or a loved one’s), or another financial setback, inform your credit card company. You may be able to negotiate a lower interest rate, lower fees and penalties, or a fixed payment schedule.

Hardship plans have no direct effect on your credit rating. However the credit card company may send a note to the credit bureaus informing them that you’re participating in the program. They may also close or suspend your credit card while you’re paying off the balance, which can ding your credit score.

6. Change Your Spending Habits

Changing how you spend your money is key to paying down debt — and to avoid racking up more in the future. You can approach this in two ways: as a temporary measure while you pay off your cards, or a permanent downsizing of your lifestyle.

The advantage of the temporary approach is that people are generally more willing to give things up when it’s for a limited time. For instance, can you suspend your gym membership during the warmer months when you can work out outdoors? Perhaps you can challenge yourself to cook at home for 30 days to save on restaurants. Imagine going without paid streaming services for six months.

String enough of those small sacrifices together to cover a year or two, and see how quickly your credit card payments grow. And your payoff term shrinks!

Downsizing your lifestyle has its own appeal, even for people who aren’t paying down debt. Living below your means is key to accumulating wealth. How exactly you accomplish that isn’t important. For instance, you can frequent cheaper restaurants, reduce the number of times you go out each month, or merely avoid ordering alcohol and dessert. The bottom line is to save money, avoid debt, and enjoy the financial freedom that results.

7. Personal Loan

Similar to a zero-interest credit card, a personal loan is a form of debt consolidation. Personal loans tend to have lower interest rates than credit cards, saving you money. And if you’re carrying a balance on multiple credit cards, a personal loan allows you to simplify your debt with one fixed monthly payment.

Personal loans are a great option for people with good to excellent credit. That’s because your interest rate is determined largely by your credit score and history. You can typically borrow between $1,000 and $100,000, and use the money for just about anything.

The Takeaway

Credit card debt can sneak up on you. If you’re carrying a balance on one or more cards, there are numerous ways to approach paying down your debt. Start with a new budget that prioritizes your credit card payment along with your other monthly bills, and trim your spending accordingly. Then combine a broad payoff strategy (the Snowball, the Avalanche) with other tips and tactics (zero-interest credit cards) to minimize your interest payments and shorten your payoff term. And remember: You’re not alone, and you can do this!

If you’re thinking about consolidating credit card or other debt, a SoFi Personal Loan is a strong option to consider. SoFi’s Personal Loan was named NerdWallet’s 2022 winner for Best Personal Loan for Good and Excellent Credit, and Best Online Personal Loan overall.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Thanks to high demand, inflation, and labor and material shortages, home repairs costs are rising. Last year, the average household spent $3,018 on maintenance costs and $2,321 on emergency repairs, according to Angi’s State of Home Spending Report. Homeowners in states that experience extreme weather spend even more.

The most common home repairs include the usual suspects: electrical, plumbing, HVAC, water damage, and termite damage. Keep reading to learn more about these issues and the cost of repair or replacement, so you can be prepared when reality bites.

Estimated Costs of the Most Common Home Repairs

Low-cost preventive measures — like cleaning your gutters or using storm windows — can help keep common home repair costs down. But when a pipe bursts and floods the bathroom, you can be on the hook for thousands of dollars. By evaluating your home’s weak spots, you can plan ahead and include certain repairs in your budget.

Below is a roundup of the most common home repairs and their cost.

Recommended: How To Pay for Emergency Home Repairs

Foundation Repair

Foundation damage affects houses when the weather swells the water table and contracts with drought. These kinds of shifts put the foundation at risk, and the extra moisture potentially makes the wood support beams an enticing target for termites. Since the foundation is the footprint of your home, repairs can be complicated and expensive. Foundation damage is also a common home repair needed after home inspection and can cost north of $10,000.

Average cost of foundation repair: $2,000–$7,500; up to $25,000

Electrical Issues

While DIY home repairs are fun to watch on before-and-after shows, electrical issues and wiring are best left to professional electricians. After all, mistakes can lead to electrocution or fire. Depending on what kind of electrical issues you’re facing, your bill could be anywhere between a few hundred to thousands of dollars.

Average cost of electrical repairs: $100–$400 for minor work; $2,500 for electrical panel replacement

Roof Repair

When there’s a problem with your roof, you need to fix it fast — or risk eventual water damage to your home’s interior. Key signs of roof damage are ceiling stains, leaks, and missing shingles. If you suspect something is wrong with your roof, call an expert right away, and be prepared to pay thousands of dollars for repairs.

Recommended: How to Get Your Personal Loan Approved

Average cost of roof repairs: $950; $8,000 for full roof replacement

Repair or Replace a Water Heater

Due to mineral buildup and the routine breakdown of components, water heaters do not last forever. Depending on how extensive the repairs your water heater requires, you can be on the hook for a new unit entirely. And if you’ve ever taken a cold shower in the middle of winter, you know this is one repair that is essential to your quality of life.

Average cost of water heater repairs: $600; $1,700 to replace

Water Damage

Water damage is fairly common. It can result from the smallest crack in an old pipe or an unusually strong storm. Water damage restoration can involve replacing wallboard, flooring, ceilings, and more — and ensuring that no mold spores are left behind to spread once the repairs are complete. Two important factors influencing price are the square footage affected and the type of water.

Average cost to fix water damage: $2,600

Smarter Ways to Get a Car Loan

Repair Pipes or Install New Pipes

Fixing older pipes is the kind of home repair often needed after a home inspection. Dated construction materials with a known problem in their manufacturing, ancient septic or sewage drain systems, and simple failures caused by the passage of time can all come into play. And because pipes run behind walls and underground, repair costs often include patching up interior holes and dug-up yards.

Average cost to install pipes: $600–$1,600 per fixture; $5,000 for a new sewer line

Septic System Repair

Replacing a septic system is far from glamorous work. Good plumbers deal with sewage on a regular basis, but it’s not their favorite home repair task. Expect to pay a premium for someone to do the dirty work of repairing your waste lines.

Average cost to repair a septic system: $1,750; $6,000 for new installation

Heating or Air Conditioning Repair or Installation

Whether running on gas, oil, or electric, a new heating or cooling unit is a costly but worthwhile investment, one that should last you 12 to 15 years. In the middle of a summer heatwave or winter coldsnap, this is one costly repair that you won’t want to put off until it fails completely.

The financial savings from having a newer, more energy-efficient AC unit are often worth the cost of replacement. Having the peace of mind that your family will remain comfortable in extreme conditions is also something to consider.

Average cost to fix a heating or air conditioning unit: $350 for AC repair; $4,500 for furnace installation

Mold Removal

Mold develops inside homes as a result of moisture and can lead to health problems. It’s potentially dangerous for all individuals, but especially for small children. If you discover mold in your home, you need to get it removed ASAP.

Removing minor mold growth can sometimes be achieved with a mold removal product, hot soapy water, or a bleach mixture. But if the growth is extensive, you’ll want to call in a professional.

Average cost of mold remediation: $2,350

Termite Damage

The problem with termites is that they literally eat your house. Figuratively, they can eat your money. According to Terminix, each year termites are responsible for $5 billion worth of damage in structures across the United States. An infestation can easily cause $3,000 of damage to your home.

The cost of treatment will depend on how long the pesky insects have been chewing away at your home’s structure. At the first sign of termite damage, you’ll want to call in a professional. It’s also wise to have a pest control expert take a look at your real estate before putting it on the market, to avert surprises at closing.

Average cost to repair termite damage: $575 for treatment; $3,000 to repair damage

Average Cost of Home Repairs

Even the experts say that trying to predict future home repairs is nigh impossible. However, there are several rules of thumb that can help homeowners:

•   The 1% Rule. Set aside at least 1% of your home’s value each year for maintenance and home-related emergencies. That means a $500,000 home requires $5K in savings annually or $416/month.

•   The Square Foot Rule. It makes sense that a larger home may cost more to maintain. Save $1 for every square foot of livable space each year. For instance, a 2,500-square-foot house requires a $2,500 repair budget or $208/month.

•   The 10% Rule. Budget an extra 10% of your monthly home expenses; that includes your mortgage, property taxes, and homeowners insurance. So a homeowner who has a $1,400 mortgage payment, $500 in prorated taxes, and $100 in prorated insurance should save $200/month.

If you’re still saving up when an emergency repair rears its head, you have options. You can borrow from friends and family, use a credit card or home equity line of credit (HELOC), or take out a personal loan. Home repairs and renovations are one of the most common uses of personal loans.

The Takeaway

It’s tough to predict the cost of home repairs. Different budgeting standards suggest putting aside 1% of your home’s value or $1 per square foot annually. Last year, the average household spent $3,018 on maintenance costs and $2,321 on emergency repairs — more in states experiencing extreme weather. Among the priciest home repairs are major foundation work (up to $7,500), roof replacement ($8,000), and new septic systems ($6,000).

Even expenses like fixing termite damage or replacing a broken water heater can all but consume your savings. Consider a SoFi Personal Loan to cover your repairs. Borrow from $5k to $100,000 at a low fixed rate, with no fees required. Our Personal Loan Calculator can show you how much you qualify for. And you can finally stop worrying about having to cut corners or postpone an important repair.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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