What is Credit Card Billing Cycle and Due Date?

A Credit Card is a convenient payment tool that provides the benefit of buying now and paying later. Your transactions in a particular billing cycle are billed to you every month. You must repay the bill amount before the due date to restore your credit limit and avoid defaulting on your payments. Here, you can get information on Credit Card due dates and billing cycles.

As a Credit Card user, you ought to know the following terms:

1. Billing cycle length

The credit card billing cycle length usually ranges from 28 to 31 days, though it can vary between card issuers. This cycle covers the period from one statement date to the next, during which transactions are recorded and billed. If you have multiple credit cards, be aware that each may have a different billing cycle and due date.

2. Statement date

Once the billing cycle ends, the card issuer compiles and processes all the transaction details. A statement, known as the Credit Card bill generation date or statement date, is then issued, summarising your credit card activity. This statement includes previous balances, purchases made during the cycle, ongoing Equated Monthly Instalments (EMIs), outstanding amounts, interest charges, late fees (if applicable), and the new balance.

3. Repayment period

After the Credit Card bill generation date, there is an interval within which the cardholder must pay their dues. Companies typically offer a 10-15 day repayment period for Credit Card bills.

4. Payment due date

The day when your grace period is exhausted is called the credit card payment due date. Now, it is crucial for you to pay the entire outstanding balance to avoid any late fees.

5. Outstanding amount

Your outstanding balance is the amount that is required to be paid after your bill's grace period. It also includes dues of previous months, if any.

6. Minimum amount due

The minimum amount due is a portion of your total outstanding balance that you must pay to avoid late fees. Failing to pay this minimum amount by the due date can negatively affect your credit score. Typically, the minimum due is either a percentage of the total bill or a fixed amount, whichever is higher.

For example, if your card’s statement is generated on the 15th of each month and the payment due date is the 5th of the following month, you’ll have until the 5th of February to pay a ₹10,000 bill received on January 15th. You can either pay the full ₹10,000 to restore your credit limit or make a minimum payment, say 5% of the bill, which would be ₹500. If you pay only the minimum, your outstanding balance will be ₹9,500. Interest will accrue on this remaining amount, which you will need to pay in the next billing cycle.

To keep things simple, the Reserve Bank of India (RBI) has mandated all Credit Card issuers to offer a one-time chance to all credit holders to change their billing cycles. Therefore, instead of making late payments or potentially defaulting on the payments, you can ascertain a billing cycle that works for you.

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*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Credit Card approvals at the sole discretion of HDFC Bank Limited. Credit Card approvals are subject to documentation and verification as per the bank's requirement. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.