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You’re probably well aware of your credit card’s payment due date, since missing it can mean getting hit with a hefty late fee. But there’s another key date listed on your credit card statement — the closing date. A credit card’s closing date and due date aren’t the same thing; however, they are related. Understanding both of these dates and their differences can help you avoid fees, minimize interest charges, and manage your credit. Here’s what you need to know about closing dates vs. due dates.
What Is a Credit Card Closing Date?
A closing date is credit card terminology for the last day of your monthly billing cycle, and when your monthly bill is generated. Any new purchases you make after this date will apply to the following month's statement.Billing cycles generally run 28 to 31 days. On your closing date (the last day of that cycle), your credit card issuer will add up all the charges you made during that billing cycle. If you had a previous balance, it will add that, too, plus any monthly interest charges that you owe on that previous balance. The issuer will then determine the total amount due, as well as the minimum payment you must make on or before your due date to avoid a late payment fee. Typically, you have a grace period of 20 to 25 days between the statement closing date and the day your payment is due. During this time, you won’t rack up any interest on purchases made during that billing cycle, which is why it’s called a “grace period.”
How Does Your Credit Card Closing Date Affect Your Credit Score?
Your statement closing date is also the date that your account’s balance and payment information are transmitted to the major consumer credit bureaus — Experian, Equifax, and TransUnion. Generally, the lower your credit balance is at this time, the better.Here’s why: Your credit utilization ratio, which measures how much of your available credit you are actually using, impacts your credit scores. Credit utilization is expressed as a percentage — generally, the lower this number, the better. A low credit utilization means you are not using a large portion of the credit available to you. This tells creditors and lenders that you are unlikely to default on your debts.If you are concerned about your credit scores, you may want to pay off as much of your credit card balance as possible before your statement closing date, rather than waiting for your due date. Doing this can lower your credit utilization ratio and, if you had a lot of expensive purchases during that billing cycle, could help you avoid a hit on your credit score.Recommended: 5 Factors That May Affect Your Credit Score
What Is a Credit Card Due Date?
Your credit card’s due date is the date that payment on the card is due. It is listed on your monthly statement, along with your minimum payment. This is the last day you have to make the minimum payment to avoid a late fee. The way credit cards work is that your due date will be on the same calendar date every month. So if payment is due on January 21, next time it will be due on February 21, and so on.Paying your credit card balance off in full on or before your card’s due date means that you won’t have to pay interest on your charges. This can be a smart move since credit card interest rates can be steep.Of course, you don’t have to wait for your card’s due date to make your payment. You can make credit card payments (partial or in full) any time. Typically, the easiest way to do that is to log onto your account and pay online. If you mail your payment to the credit card issuer, keep in mind that it needs to arrive by the credit card due date. For that reason, it can be a good idea to send it out at least a few days in advance to make sure it gets there on time.Recommended: Credit Card Requirements to Know
The Difference Between Credit Card Closing Date and Due Date
The credit card closing date is the end of the billing cycle and when the credit card statement is generated. The statement will include all of the charges you made during that billing cycle. The credit card due date, on the other hand, comes several weeks later. This is when at least a minimum payment is required for those charges.
Determining Your Next Credit Card Statement Closing Date
Your credit card’s billing statement might list the next closing date. If it doesn’t, however, it’s easy to figure out. The first step is to determine the number of days in your billing cycle. You can determine that by looking at your statement: The starting and ending dates of your billing cycle are generally listed on the first page near the balance. Your card issuer may also list the number of days in your billing cycle. If not, you can simply count the number of days between the opening date and closing date. For example, if the first day of your billing cycle is April 2 and the last day is April 30, your billing cycle would be 28 days long.To determine your next credit card closing date, simply add the number of days in your billing cycle to your current statement’s closing date. That date is when your next billing statement will close. For instance, if your last billing statement closed on July 2 and you have 28 days in your billing cycle, your next closing date will be July 30th.
Changing Your Credit Card Due Date
Not thrilled with your credit card’s current payment date? Maybe you’d prefer a due date that falls on or just after your payday, or one that gives you more breathing room between your credit card bill and other monthly bills.The good news is that your credit card due date isn’t necessarily set in stone. You may be able to change it just by logging onto your account online or by calling the customer service number on the back of your card.Just keep in mind that a new pay date will change your statement closing date. Also, your credit card issuer likely won’t let you skip a payment by changing your due date.Recommended: How to Find the Right Credit Card
What to Know About Determining Your Time to Pay
When should you pay your credit card bill? While you must pay at least the minimum by the due date, you can always pay it early. Is there any advantage to this?Maybe. If you’re looking to lower your credit utilization ratio to help build your credit, you may want to pay at least some of your balance by the statement closing date, which is when card issuers typically report to credit bureaus. This will reduce the balance being reported, which could have a positive impact on your credit by lowering your credit utilization. If you pay on the due date (weeks later), your credit report likely won’t show the reduction in your balance with the payment.
Other Important Credit Card Dates
Beyond the account’s closing date and payment due date, there are several other important credit card dates to be aware of.
Annual Fee Due Date
If your credit card has an annual fee, it will appear on your credit card statement as a lump sum charge (just like a purchase), typically during the first month after you sign up for a credit card, and then every 12 months after that.
Introductory Offer Date
Many of the best credit cards come with introductory offers, such as a 0% APR or bonus rewards for a certain period of time after you sign up. These special offers typically start when your application is approved. The date the promotional period ends is called the introductory offer date. It can be wise to keep a new card’s introductory offer date in the back of your mind so you’ll know when the interest rate may change or if you should make necessary large purchases sooner, rather than later.
Credit Card Expiration Date
All credit cards have expiration dates, usually expressed as a month and year on your card. After the last day of the month specified, the card will no longer be valid. However, this doesn’t mean your account is closed. You will typically receive a replacement card in the mail well before your card’s expiration date. Once you activate the new card, you’ll want to destroy your old one (since the account number may be the same).
Transaction Date
The transaction date indicates the day a purchase was made. It’s not necessarily the same as the posting date, which is when the charge is actually applied to your account. In some cases, a transaction will be listed as pending for several days on your credit card account. The posting date is when the charge is actually applied to your account, which may be different from the transaction date.
The Takeaway
The closing date is the last day of a credit card’s billing cycle. The payment due date is 20 to 25 days later and is when you need to pay at least your minimum amount due to avoid a late fee. It’s ideal to pay your credit card balance off in full by the due date. Doing this will allow you to avoid any interest charges. If you’re trying to build your credit, you may even want to consider paying off your card even earlier — by the statement's closing date. Bringing your card’s balance to zero by the closing date can reduce your credit utilization ratio, which gets factored into your credit scores.If you’re looking for a new credit card with better rates and terms, or one that will help you build your credit score, Lantern by SoFi can help. Our online marketplace allows you to browse different types of cards (including credit-building cards) and compare numerous credit card offers easily and conveniently all in one place.
Frequently Asked Questions
Can you change your credit card closing date?
Should I pay off my credit card before the closing date?
Can I use my credit card on the day of the closing date?
Why is my closing date after my due date?
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About the Author
Jason Steele
Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.
