February 10, 2025
The credit card billing cycle, also known as the credit card statement cycle, refers to the period during which bills are generated. Every transaction made during this period will be reflected on your monthly card statement.
For example, if the credit card's billing or statement date is the fourth of each month, the billing cycle will normally begin on the fifth of the previous month and end on the fourth of the current month. When the billing cycle closes, your statement will include every payment, cash withdrawal, and purchase you made during this period.
The statement date, also known as the billing date, is the day on which each monthly statement is generated. Typically, it is the last day of the billing cycle for any particular month. All transactions made with the card after the billing date are recorded in the subsequent billing statements.
Simply said, the minimum payment or minimum due refers to the smallest amount of money that must be paid each month before the credit card due date to cover outstanding payments on your credit card. When you continue to make the minimum payments on your card balance, you will not incur late fees or negative points. However, interest on credit cards accrues on outstanding balances.
When you are unable to pay the entire outstanding amount on your card for a given month, you can pay a lower portion of your balance to avoid the late penalty. A tiny portion of the amount, known as the Minimum Amount Due (MAD), is determined by the credit card issuer. MAD is indicated on the credit card bill for the month.
Now that you understand the billing cycle and other relevant facts, you should be able to interpret your credit card statement more easily. In any case, to get the most out of your credit card, remember to pay your bills on time every month.
