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What Is the Closing Date on a Credit Card?

Last Updated: May 3, 2024

3 min read

Key Points:

Your credit card closing date is the last day of your billing cycle.
Your credit card statement generates at the end of your closing date, and the due date is at least 21 days later.
If you don’t pay your credit card’s minimum payment between the closing date and the due date, you may incur a late fee.

Don’t feel overwhelmed when you look at your credit card statement, especially if you’re new to credit. We know there are a lot of terms that sound like the same thing-transaction date, payment due date, and closing date. But this guide will help you understand those terms.

It’s important to know the differences so you can build and maintain a good credit score. By keeping up with your payment due dates each month, you’ll avoid late payment fees. You can even avoid paying interest if you pay your balance in full before the closing date.

What is a credit card closing date?

The credit card closing date is the last day of the billing cycle on your credit card. On the credit card’s closing date, your credit card issuer adds up all of the transactions from the last month, plus any interest charges, and generates your credit card bill, or billing statement. Any pending purchases, payments, or credits that haven’t yet posted to the account by the end of that day will now be part of the next billing cycle.

What is the difference between your credit card closing date and payment due date?

Your credit card payment due date is the day that you must pay at least the creditor’s minimum amount (based on your overall balance). It’s based on the closing date of your last billing cycle. The due date is at least 21 days after the closing date (remember, this is when the credit card statement was generated).

That 21-day period is referred to as a credit card grace period. During this time, you won’t accrue interest unless you carried a balance forward from the previous billing cycle (any amount you didn’t pay off in the previous month), or you made transactions which don’t have a grace period, like a cash advance.

The amount on your credit card statement is the amount you’re responsible for paying on the payment due date. You have the option to pay the full balance or the minimum payment (or anything in between).

If you make a payment before your closing date, you’ll avoid interest charges on that amount (Residual interest will accrue after the statement date if you have a balance transfer, cash advance balance, or have been carrying a balance from month to month).
If you don’t pay at least the minimum payment, your credit card issuer can charge you a late fee and your credit score may be lowered.
If you at least make the minimum payment (which will also be created on the closing date), you can avoid that late payment fee.

Use the Discover credit card interest calculator to see what interest you’ll owe on any credit card balance. You can also see how increasing your monthly payments may help you pay your debt down sooner.

How your credit card closing date affects your credit score

Once a month, your card issuer may report your credit card balance (and other account information) to one or more of the three major credit bureaus. A credit bureau collects your data from financial institutions and use it to create your credit history and credit score.

This is where it becomes important to maintain a low balance. The lower your balance, the lower your credit utilization ratio. This ratio is the total balance of all your accounts divided by the total credit limit on all of your credit cards. According to the Consumer Financial Protection Bureau, this should be kept at under 30% to maintain a good credit score, but the lower, the better.

Did you know?

Your credit utilization is the second most significant variable in calculating your credit score. Your payment history, including any late payments, is the most significant variable affecting your credit score, accounting for 35% of the score on your credit report.

Should I pay off my credit card before the closing date?

Making on-time payments is crucial to your credit score. If you give yourself ample time to pay the full amount on or before your due date, you’ll also avoid paying interest (if you are in the grace period for all charges) and a late fee.

The balance reported on your statement is a variable in your credit utilization ratio, so paying the balance before the statement date can improve this number. This could help your credit score if your ratio was previously high.

As mentioned above, you may also avoid interest by staying ahead of your spending. Most credit card companies apply a daily interest charge based on your Annual Percentage Rate (APR), which compounds over time. You can save on these daily interest charges by paying early.

Paying the minimum amount is important if you want to avoid late fees and credit card debt, but you can’t avoid interest fees unless you pay the full amount. Your credit card statement includes a minimum payment disclosure to let you know how long it will take to pay off your current statement balance when only making the minimum payments.

Your credit card closing date and due date are important credit card dates to know if you want to keep your credit score high and avoid interest payments.

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