Credit Card Closing Date Vs. Due Date: What’s The Difference?

Most people know it’s important to pay a credit card bill on or before its due date. If you make a late payment, your credit card company can charge you a fee. If you pay 60 days late or more, the issuer can raise your interest rate – and that’s just the start.

If you pay your credit card bill 90 days past its due date, your credit score will drop – often by 100 points or more. Late payments can result in a lower credit score and higher interest rates for future loans or credit cards.

That’s why it’s critical to keep an eye on the calendar. Did you know credit card bills have two key dates? Your credit card’s due date is the last day to make your minimum monthly payment and avoid being hit with a late payment fee. Your credit card statement closing date is the other date to know. On this date, your issuer determines how much you’ll owe on your due date.

Let’s take a look at credit card closing dates and due dates, their differences and how they can affect you and your credit.

What Is A Credit Card Closing Date?

Your credit card’s statement closing date is the last day of your billing cycle. Credit card billing cycles generally last 28 – 31 days. Your credit card company adds up your charges during your billing cycle. The amount you owe on your card’s statement closing date will determine the amount of interest you’ll pay on your due date.

Your due date usually falls 20 – 25 days after your closing date. For example, if your closing date falls on the first day of the month, you’ll usually make a payment between the 21st and 26th day of the month.

On your closing date, credit card issuers calculate any monthly interest charges you owe in addition to the total amount of new charges you made during your billing cycle. Your issuer will also determine the minimum payment you must make on or before your due date to avoid a late payment fee. If you make the minimum payment due, you won’t face any late fees, but interest will be charged on the remaining balance.

What Is A Credit Card Due Date?

Your credit card due date is the date by which you must make at least your minimum payment to avoid late fees. Typically, there are 20 – 25 days between your statement closing date and your payment due date. This period of time is known as the grace period. During this time, you can collect the money you’ll need to pay your credit card bill.

That said, you don’t need to wait until your card’s due date to make a payment. You can make credit card payments at any time, even before your closing date. You can pay off your statement balance in full or make a partial payment.

Paying off your credit card balance before your payment due date and during the grace period means you won’t pay interest on your purchases. Taking advantage of a credit card’s grace period can be a smart financial move. Credit card interest rates are high, often 16% or higher. If you don’t pay the balance off in full on or before the due date, you can be charged hundreds of dollars in interest on the remaining balance.

Payment Due Date Vs. Closing Date: An Overview

We summed up the differences between due dates and closing dates below.

How Does Your Credit Card Closing Date Affect Your Credit Score?

Every month, your credit card provider reports the balance on your card to the three national credit bureaus – Experian™, Equifax^® and TransUnion^®. Each bureau keeps track of your credit report. The information in your credit reports from the three bureaus is used to calculate your three-digit FICO^® Score. The lower your credit card balance, the better your credit score.

A lower credit card balance leads to a better credit utilization ratio. Credit utilization ratio measures the amount of available credit you’re using. While there’s no rule on how much credit you can use at any one time, most financial advisors suggest keeping your utilization at or below 30%. For example, if you spend $1,500 and have a credit limit of $5,000, your credit utilization ratio is around 30%.

A lower credit utilization ratio is always better for your credit score. If you have a low amount of credit card debt, your credit score will rise. If you’re using most of your available credit when your card provider reports to the credit bureaus, your score will drop.

A higher credit score can make your financial life easier. It should be easier to qualify for loans and new credit cards with a high credit score. And you’ll likely qualify for lower interest rates.

Paying off as much of your credit card balance before your statement closing date will lower your credit utilization ratio and help you avoid a hit on your credit score. If you miss your credit card payment by 30 days or more, the card issuer will report it as late to the credit bureaus, and your late payment could cause your credit score to fall by 100 points or more.

Can You Change Your Credit Card Closing Or Due Date?

Would a new closing or due date make sense for your finances? You can ask your credit card company to change either date, but a change in your payment due date will trigger a change to your statement closing date.

Here’s an example: Maybe you get paid on the 5th and 20th of every month. If your credit card’s due date is the 15th, you may want to ask your provider to change your due date to the 21st of the month. That way, you’ll have more funds to pay more of your debt and lower your credit card balance.

Call the customer service number on the back of your credit card and ask a service representative to change your card’s due date. If your card company agrees – and they usually do – changing the due date will change your credit card’s statement closing date.

FAQs About Closing Dates For Credit Cards

Continue reading for answers to several frequently asked questions about credit card closing dates.

What is a closing date for a credit card vs. a due date?

The credit card closing date is the last day of your billing cycle. A billing cycle usually lasts 28 – 31 days. The due date is the last day your credit card payment is due. It usually comes 20 – 25 days after the closing date.

How soon after the closing date can I use my credit card?

You can use your card any time after the closing date as long as you have available credit. Any purchases made after the closing date will count toward the next billing cycle.

Can I use my credit card 2 days before the statement closing date?

You can use your credit card any time before the closing date. However, if you use your card 2 days before the closing date and you’re not prepared to pay the balance off before the closing date, anticipate an interest charge. To avoid a hefty interest charge, it can make financial sense to make only smaller purchases on your card shortly before the closing date.

What happens if I use my credit card on the closing date?

Your credit card’s closing date is the last day of your billing cycle. Depending on your credit card company’s processing time, charges made on the closing date may be attributed to the current or following billing cycle. Any purchases made after your closing date will count toward your next billing cycle. Look back at your credit spending history to get an idea of how long transactions take to post to your account, or call your credit company for more details.

Why might I change my credit card due date?

A cardholder may need to change their closing date for several reasons:

• If the new date comes after payday, it may make it easier to pay your balance.
• You may want to space out bill payments, making sure you have breathing room between your rent, credit card(s) and utility payments.
• You may want to increase the likelihood of paying your balance off in full and improving your credit utilization ratio.

When is the best time to pay your credit card?

It’s best to pay your credit card before the due date. That way, you can avoid damaging your credit or racking up late fees. However, paying your credit card bill before the closing date can lower your credit utilization ratio and save you money on interest.

The Bottom Line

It’s important to remember your credit card’s due date – and make at least your minimum monthly payment before that date. But your closing statement date is another important day in your credit card’s billing cycle. If you can swing it, pay your card’s balance in full by the closing statement date to save money in interest and help boost your credit score.

Want more transparency in your spending? Sign up for the Rocket Money^SM app today to help track your spending and get notified when payments are due.