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Credit Card Bill: What is Billing Cycle, Due Date and Minimum Payment? How it is Calculated

Although the word ‘plastic’ rubs people the wrong way these days, there is one thing that people are greatly fond of, despite it having the word ‘plastic’ in it – Plastic Money. Dipped in lucrative deals, convenience, and safety, plastic money is one of the most preferred forms of transaction. As a result, credit cards have found a pocket in almost every wallet. As per the reports, India has roughly 64 million credit cards in circulation as of 2021.

There are several things to be enlightened about before you become an avid credit card user. The list runs of moderate length. However, the first and foremost thing to know about is the billing cycle. The billing cycle acts like a skeleton upon which factors like expenditure patterns, usage, and credit, depend on. In case you’re a multiple credit card holder, then the billing cycle needs utmost attention.

The credit card billing cycle refers to the period, at the end of which, a statement consisting of all the necessary details and numbers is generated. This tenure can be anywhere between 28 to 32 days and begins with the moment you activate your credit card. All the transactions, cash withdrawals, charges associated with transactions and finances, outstanding balance interest, etc., are mentioned in the statement churned out after every billing cycle.

A statement is generally carved out according to the date on which you are required to clear your outstanding credit card balance. Although there is no compulsion to pay the entire credit card amount, you must pay the minimum charges listed as per the requirements. If not, it can reflect negatively on your credit score, which brings a whole different set of issues.

Minimum charges are usually a small chunk of the total amount you are liable to pay. Credit cardholders are required to pay the minimum charge to avoid the late fee charge and to keep their credit card account alive. However, it must be kept in mind that after the minimum amount is paid, the remaining balance is vulnerable to interest and can be as high as 48% annually. Therefore, it is better that you pay the entire amount before the due date arises. The due date is set somewhere between 21 to 25 days since the generation of the previous bill.