Credit Card Billing Cycle - How it Works

News About Credit cards In India

A credit card billing cycle is simply the time period between billing statements. The length of your billing cycle varies from issuer to issuer and may range from 27-31 days. At the end of your billing cycle, your statement is compiled by your credit card provider and you have until your due date to make the payment.

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Let us understand this with a simple example:

Assume your credit card statement is generated on the 6th of each month. Your credit card billing cycle will begin on the 7th of the previous month and will end on the 6th of the current month. During this time, all credit card transactions will appear on your monthly credit card statement. This includes all credit card payments, cash withdrawals (if any), and ongoing credit card EMIs. In this example, we have considered the billing cycle to be of 30 days, but it may vary depending upon the type of card and your credit card provider.

Credit card Due Date

Your credit card due date is the last date until which you are supposed to clear your bill and it is usually after 15 to 25 days from the statement date. For instance, let us consider that your credit card statement is generated on the 6th of every month and your due date is the 26th of the same month. What this simply means is that you have to pay your dues till the 26th and no extra charges will be levied on paying within this time frame.

Credit Card Interest Free Period

A credit card interest free period is the duration for which the amount used on a credit card does not attract any interest. It can also be understood as the duration between the first day of the billing cycle and the day on which the payment is due. Let us understand interest free period with an example:

• Statement Generation Date – April 6th
• Due Date – April 26th (20 days)

So, here the statement generated on April 6th has all the transactions that occurred between March 6th to April 5th. Let us take into consideration, 5 transactions that took place before the bill was generated on April 6th.

• March 16th – Rs, 1,500
• March 7th – Rs. 2,500
• March 31st – Rs. 10,000
• April 2nd – Rs. 1,000
• April 4th – Rs. 1,200