What Is a Credit Card Billing Cycle?

By Bob Haegele · May 31, 2024 · 7 minute read

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What Is a Credit Card Billing Cycle?

You can count on your credit bill arriving every month, thanks to your billing cycle, or the length of time between one statement’s closing date and the next. But how does a billing cycle for a credit card work and does it impact your credit score? Many of us aren’t exactly sure, even if we regularly swipe and tap our cards in daily life.

Understanding the ins and outs of a credit card billing cycle can help you manage your money, make sure you have enough set aside to pay your bills, and avoid unnecessary fees.

Definition of a Billing Cycle

A billing cycle on a credit card is the length of time from one billing statement closing date to the next. The exact number of days in a billing cycle may vary, but they usually last from 28 to 31 days.

Credit cards usually have monthly billing cycles and require cardholders to make payments every month. Billing periods must end on the same day of every month, such as on the last calendar day.

The Consumer Financial Protection Bureau states that each billing cycle should be equal. “Equal” in this case means each billing period must not vary more than four days from its usual length. So your credit card bill has a rhythm to it; you can depend upon it being ready at pretty much the same time (give or take a few days) every month. That way you can plan ahead to have enough money in your checking account to cover it.

How Does a Credit Card Billing Cycle Work?

Credit card billing cycles coincide with a certain day of the month. During each billing cycle, new transactions are added to your billing statement. Your swipes, taps, online purchases, and credits are all being tracked and compiled.

Then, at the end of the billing cycle, the card issuer will send you a credit card statement, either electronically or by mail. Whether you receive a paper or electronic statement depends upon whether you opt into paperless billing. It’s important to note the due date and make a payment of at least the minimum amount due by that date to avoid incurring late fees on top of those typically high credit card interest rates.

Fortunately, credit card billing cycles often come with a grace period, which is a time between the end of the billing period and the due date. You won’t be charged interest during this time. By law, credit card companies must deliver your statement to you at least 21 days before the payment due date.

If your credit card is paid in full between the time you receive your statement and the due date, no interest will be charged. However, if there is still a remaining balance after the due date, interest may start to accrue.

How Long Is a Billing Cycle?

The length of a credit card billing cycle can vary, but the length is usually between 28 and 31 days, just like the months of the year.

Credit card billing cycles must be as close to the same length as possible from one month to the next. But they can vary by up to four days to take into account things like weekends, holidays, and months that are different lengths.

Check your statement to find out the exact length of each billing cycle. The first page of the statement usually shows such information as opening and closing date. All of the transactions on the statement fall within that date range.

Can I Change My Billing Cycle?

Your card issuer probably won’t allow you to change some things related to your billing cycle, such as the billing period length. However, one of the things you may be able to change is the date when your credit card payment is due. You may find that helpful because a different due date might suit your situation better.

For instance, you might be able to sync up your payment due date to fall after you get paid, so you know there’s money in your bank account.

Keep in mind that not all card issuers will be flexible with this, and many will only allow you to change your due date within a certain time frame. And if you do request a due date change, it may take one to two billing cycles to take effect. Hence, you should monitor your statement to watch for the change.

Also, note that your card issuer has the right to change the terms and conditions of your credit card agreement at any time. However, if they do so, they generally must notify you 45 days in advance.

How Does A Billing Cycle Affect Your Credit Score?

Your credit card billing cycle can impact your credit score if you aren’t able to pay at least the minimum due on time. Most credit card issuers send monthly updates to credit reporting bureaus about your credit usage. The three main credit reporting bureaus are Experian, TransUnion, and Equifax. These updates usually coincide with your billing cycle date.

On your billing cycle date, reporting bureaus may receive information about your credit usage, including any instances of late payments on your credit cards. Late payments can have a negative impact on your credit score, so be sure you are aware of the due date on your statement at the end of your billing cycle.

It’s also important to be aware that paying your bills on time, all the time, can be one potential way to help build your credit.

Why Understanding Your Billing Cycle Is Important

Understanding your billing cycle and how it works is key to your financial health. Here’s why:

•   Your billing cycle lets you know when your next payment is due and the minimum amount due. Paying the minimum can help you avoid penalties and possible hits to your credit score. Paying the full amount due will avoid accruing interest.

•   Understanding your billing cycle may help you budget more effectively. Because you know when you have to pay your credit card bill, you can set money aside to make your payments on time. You can request your due date be moved a bit to better suit your cash flow, if needed.

•   It will help you monitor your credit card balance more efficiently. That purchase you made today might not appear on the last statement issued, but it will appear on the next one. You may use your cycle’s timing to schedule purchases for the optimal time in terms of keeping your balance due in check.

The Takeaway

Your credit card billing cycle is the period of time between one billing statement’s closing date to the next. This period usually lasts between 28 and 31 days and should be as close as possible to the same length every month. Be sure to pay at least the minimum by the due date to avoid penalties and fees as well as possibly hurting your credit score.

You can request that your due date be moved, if that would help you better manage your budget, and you will likely have a few days’ grace period in which to pay your bill without getting hit with additional charges. Given how high credit card interest rates can be, knowing and following your billing cycle is an important part of being financially responsible.

Another way to help reach your financial goals is to make sure you have enough money in savings. And choosing the right savings vehicle can potentially help your money grow. You may want to explore such options as a high-yield savings account, for instance. Paying your bills and saving for the future are important tools for securing your financial future.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

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Why is a billing cycle important?

A billing cycle is important because it keeps you informed of your credit card activity for the month. Plus, your payment is due at the end of each cycle (after the grace period), and you want to respect that to avoid accruing additional interest and fees.

How long is a billing cycle for a debit card?

Your checking account or debit card may issue regular statements, and the billing cycle length is approximately 30 days. In other words, the length is similar to your credit card billing cycle, but with a debit card, the funds are automatically deducted from your bank account. You don’t get a bill to pay.

What is two-cycle billing?

Two-cycle billing or double-cycle billing is a credit interest calculation. The interest is applied to the average of the prior two months’ outstanding balance. However, the practice was outlawed with the passing of the Credit CARD Act of 2009.

Photo credit: iStock/RichVintage

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