What Is The Closing Date On The Credit Card? – Understand In Detail
If you own a credit card, you would know that every month, you get a monthly statement. It comprises all the details of the transactions charged for that particular month and the total balance due.
However, for most credit card accounts, the monthly statement does not directly match the regular calendar month.
It actually follows a billing cycle between 28 to 31 days.
This transaction between the billing cycles can happen at any given point during the calendar month. Typically it is set up based on the time you opened the credit account.
In this article, we will be talking about what is closing date on a credit card, how it differs from the payment due date, and how it affects your monthly cash flow, your credit score, and the rewards you earn reflecting on it.
What Is Closing Date On Credit Card?
A credit card closing date is the last date of your billing cycle. All purchases you make after your credit statement’s closing date will be calculated under next month’s purchases.
The closing date is also the date on which your issuer calculates your interest charges.
Every purchase that is made after the said date will be calculated under the next month’s payments, and the interest will be charged accordingly.
For most credit cards, you are provided a grace period of 21 to 25 days between closing and payment due dates.
So, it is not just the closing date; the payment due date is equally important.
Read More: How To Choose A Credit Card That Fits Your Reward Goals And Spending Habits?
How To Find A Credit Card Closing Date?
Despite the different credit cards that you own, the way to find the closing date remains the same.
You can find the closing date on your credit card in three ways. It can either be on your mailed system, in the online account of your credit card, or on the PDF statement that is available on your online account.
Here is some information you may find listed in either of the three ways mentioned above.
Here is what you must look for:
Billing period: This is usually listed as the date ranging for about a month. It might look something like “ 03/21/2023-04/20/2023”. The ending number on the date is the closing date of your credit card.
Statement balance: You will find this either on the overview account of your account on the payment page or your statement; you will find a statement balance listed alongside the date.
The date that is available, along with the statement balance, is the closing date of your credit card. Statement closing date: In certain cases, you will find the closing date with clear labeling, usually along with the payment due date.
Importance Of The Closing Date On Your Credit Card
The closing date on your credit card implies the end of your billing cycle. This is an important factor that majorly impacts how you use the credit card in multiple ways.
Here are the major ways in which the closing date on your credit card will affect you:
Statement Balance: The new statement balance is the amount that is outstanding on your credit card as per the closing date. This will include any new charges that are made during the previous billing cycle, along with any unpaid balances that may have remained from the earlier statements.
If you fail to pay this balance within the payment due date, your credit card issuer will be charging interest on the outstanding statement balance.
Credit Utilization: Credit card companies usually report your credit utilization to the credit bureaus at the end of every billing cycle or on the credit closing date. This is important as it accounts for about 30% of your total credit score.
Rewards: If you wish to get rewards against your credit cards, you must know that most of the rewarding credit cards reward you with the points or cash back that you earn at the end of the billing cycle. However, selective cards issue instant rewards with your purchase; hence you will not have to wait till the end of the billing cycle.
Difference Between What Is Closing Date On Credit Card And What Is Payment Due Date?
Now that you are aware of the closing date on your credit card, you may be wondering what a payment date is and how it is different from the closing date.
Before getting into the differences, let us first understand what is the payment due date is on your credit card.
The payment due date on your credit card is the deadline that you get to make a timely payment. You will be able to see the payment due date on your credit statement at the end of every billing month, along with your balance and minimum payment.
The payment due date is the last date by which you can make it before you are charged a late fee or other penalties.
It mostly falls on the same calendar date. For instance, if your payment due date is 25th
April, the next date will be 25th May, 25th June, and so on.
Now that you know about the payment due date, let us go through the differences between the payment due date and the closing date.
The very basic difference between the closing date and the payment date is there in the name itself. The closing date particularly implies the end of the cycle. The payment due date is the deadline by which you are to clear all payments without facing any penalties.
Some Of The Other Important Dates On Your Credit Card
Here is a list of the other accounts that you may be able to find on your credit card:
- Annual Fee Due Date
- Introductory Offer Date
- Credit Card Expiration Date
- Transaction Dates
Read More: 5 Easy Steps To Pay Off Credit Card Debt Over $10,000
Wrapping Up
Well, this was all that I had to tell you about what is closing date on credit card. But while issuing one, you will get an even more detailed explanation about it. Always keep in mind the closing date and the payment due date. That will highly affect your credit points and your reputation towards the issuer.
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