Just because there is a limit to how much you can use on a credit card doesn't mean you should spend the maximum amount. How much of my credit limit should I use? The current balance keeps track in real-time of how much you owe. For example, if your statement balance is $500 for the billing period ending in August, and you spend another $100 in September without paying off the statement balance. Current Balance - This shows the statement balance plus whatever amount you spend after the most recent billing period.Statement Balance - This shows the total that you owe at the end of the most recent billing period.There are two balances on your credit card, the statement balance, and the current balance. Even worse, the balance could get out of control if you are a spender. There are interest charges for the remaining balance, and making minimum payments will never pay off your credit card debt. Please keep in mind that just because you can make a minimum payment doesn't mean you should. You don't have to pay off the whole balance each month, but credit card companies require you to make a minimum payment to reduce your credit card balance. On top of that, it will affect your credit score in a negative way. If you miss a payment or make a late payment, there are late payment fees and interest charges. There is a due day for each payment, as long as you are making payments on time, you are building good credit. Using and making monthly payments on a credit card is a good way to build your credit score.
Today's society makes it hard to imagine a life without a credit card. Without a credit card, you cannot buy things online. As soon as you pay off the $500 balance, then the limit is reset to $3,000.Ĭredit cards offer you the convenience of making purchases. As soon as the borrower pays off the credit card balance, the limit will be reset.įor example, if you are given a credit line of $3,000, and spend $500 this month, the maximum you can still use is $2,500. Credit cards offer borrowers a line of credit where they can buy things on credit up to a limit.
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