What Is a Billing Cycle and Can You Change It?

A billing cycle, also referred to as a billing period or statement period, is the time between your last statement due date and the current one. Billing cycles roughly align with a 30-day period (hence the term “monthly payments”), but they can be different lengths depending on several factors.

How does a billing cycle work?

At the end of each credit card billing cycle, a card issuer will add up the transactions that occurred during that period and any previous balances. The lender will then send you a credit card statement summarizing your account’s activity, the minimum amount due, the interest and fees and the payment due date.

Closing date vs. due date

It’s important to know the difference between your statement’s closing date and your due date.

Your bill isn’t due on the last day of your billing cycle, also known as your closing date. That’s just when the company calculates what you owe. Your due date is different: That’s the date your payment is due, which falls on the same day each month sometime after the closing date. The card issuer must mail or deliver your statement at least 21 days before the due date under the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009.^[1]

The period between the statement (or closing) date and the due date acts as a grace period: the time during which you can pay your balance in full without accruing interest. However, if you’re carrying a previous balance, you will accrue interest. The grace period applies to purchases made during a billing cycle, but it typically does not affect balance transfers or cash advances. These begin racking up interest immediately on the day they occur unless your balance transfer agreement allows for zero interest.^[2]

The grace period for credit card payments does not extend past the due date. The account holder is responsible for making the monthly payment to the lender by the due date to avoid a late payment charge or late fees.

However, being a day or two late on your payment won’t necessarily hurt your credit. While lenders may charge fees for missing the due date, they typically won’t report a payment to the three major credit bureaus as delinquent until it’s at least 30 days past due (some lenders may wait 45 or 60 days).^[3]

In summary, there are three key dates to remember when you’re thinking about your billing cycle:

• Closing date: The last day of the billing cycle, when a credit card company calculates what you owe and sends you a statement
• Due date: Occurs the same day each month and is listed on your statement
• Delinquent date: The date when a lender reports your payment as delinquent to the three major credit bureaus (Equifax, Experian and TransUnion), typically when payment has not been received 30 days after the due date

How long is a billing cycle?

Depending on the card issuer, credit card billing cycles typically vary from 28 to 31 days, which is why they’re often called monthly billing cycles.^[4]

Can you change your monthly due date?

By law, your due date must be the same each month.^[4] But that doesn’t necessarily mean you’re stuck with whatever due date your lender gives you.

Some credit card companies might allow a cardholder to fix a monthly due date that fits well with their calendar. For instance, you might want to establish a due date that’s a few days after you receive your paycheck to ensure there’s money in the bank to cover your payment (especially if you set up automatic payments).

Depending on your card issuer, you might be able to change your credit card due date online or by calling the customer service number on the back of your card. You may, however, only be able to change your due date a certain number of times each year.^[5] Wells Fargo, for example, only allows you to change your due date once every 12 months, and 10 dates are off-limits (also, it may take two billing cycles for the change to take effect).^[6]

How does a billing cycle affect your credit score?

Credit card issuers send updates on your payment history to the credit bureaus every 30 to 45 days. The credit reporting agencies then update your report, including missed payments. Some lenders may send updates more frequently.

If you request a copy of your TransUnion report, you might see a line that says “date updated,” showing the most recent day when the credit bureau received new information. You may have different due dates for different loans and lines of credit, and lenders don’t send updates on the same day, so your credit reports may update several times during a month.^[7]

For this reason, it’s helpful to check your credit report periodically to see where you stand and ensure there aren’t any errors or suspicious entries you don’t recognize affecting your credit. Under federal law, you’re entitled to a free copy of your credit report once a year, available at annualcreditreport.com. Consider staggering your free copies throughout the year by getting one free report from one different credit bureau every four months. If you want an additional report from the same bureau in the same year, a credit bureau can’t charge you more than $13.50, by law.

Here are some ways you can prevent your credit score from being affected before your grace period ends:

Pay your balance in full

Pay your bill in full for the purchases you have made before your statement’s due date. This will ensure you don’t carry a balance for purchases or accrue interest. It will also help you maintain a low credit utilization rate, or CUR — the ratio of your overall debt to your total credit limit. Your credit utilization is the second most important factor in your score as calculated by FICO®, the most widely used credit scoring system, counting for 30%.^[8]

Even if you can’t make the full payment, you can lower the amount of interest you’ll accumulate by paying more than the minimum. But whatever amount you pay, it’s important to be on time. Late payments can affect your credit score if they’re 30 days or more past your due date. Your payment history counts for 35% of your FICO score, so it’s particularly important to be on time.

For this reason, it’s important to know when the end of your billing cycle occurs, when the next billing cycle begins, and your due date.

Plan large purchases ahead of time

Marking down your due date on a calendar can help you know where you stand when planning major purchases in the future. If you’re planning to use your credit card for a large purchase, you will need to have enough credit available to do so. Paying off or paying down your balance can ensure it’s available.

But you may not want to hurt your credit utilization rate by putting large purchases on your credit card that put you near your credit limit. Depending on your situation, you have to account for all balances and your total credit limit across all revolving credit accounts to determine whether a large purchase might affect your credit utilization. Choosing another payment method, while ensuring you have enough money in your budget to make any payments on your card, is always an option as well.

Don’t carry a balance

Paying your balance in full each month can keep you from accruing interest as long as you don’t have cash advances and balance transfers: the cost of using your lender’s money. It can also help keep your credit utilization low.

How to check your billing cycle

Your billing cycle may be listed on your monthly statement or in your credit card agreement. Each issuer is slightly different, so if in doubt you can call your lender to check. This information, along with your due date, can help you set up your payments when they work best for you and avoid incurring fees or damaging your credit by missing payments.

Disclosure: FICO® is a registered trademark of Fair Isaac Corporation in the United States and other countries.

Sources

1. Federal Trade Commission. “Credit Card Accountability Responsibility and Disclosure Act of 2009,” https://www.ftc.gov/sites/default/files/documents/statutes/credit-card-accountability-responsibility-and-disclosure-act-2009-credit-card-act/credit-card-pub-l-111-24_0.pdf. Accessed January 29, 2022.
2. Investopedia. “Grace Period (Credit),” https://www.investopedia.com/terms/g/grace-period-credit.asp. Accessed January 29, 2022.
3. Investopedia. “Delinquent,” https://www.investopedia.com/terms/d/delinquent.asp. Accessed January 29, 2022.
4. Experian. “Should I Pay My Credit Card Bill Early?” https://www.experian.com/blogs/ask-experian/what-happens-if-i-pay-my-credit-card-early/. Accessed January 29, 2022.
5. Chase. “How to change your credit card payment due date,” https://www.chase.com/personal/credit-cards/education/basics/how-to-change-your-credit-card-payment-due-date#:~:text. Accessed January 29, 2022.
6. Wells Fargo. “Frequently Asked Questions,” https://retailservices.wellsfargo.com/customer/faqs.html. Accessed January 29, 2022.
7. TransUnion. “How Long Does it Take for a Credit Report to Update?” https://www.transunion.com/blog/credit-advice/how-long-does-it-take-for-a-credit-report-to-update. Accessed January 29, 2022.
8. MyFICO. “What is Amounts Owed?” https://www.myfico.com/credit-education/credit-scores/amount-of-debt. Accessed January 29, 2022.

About the author

Ana Gonzalez-Ribeiro, MBA, AFC® is an Accredited Financial Counselor® and a Bilingual Personal Finance Writer and Educator dedicated to helping populations that need financial literacy and counseling. Her informative articles have been published in various news outlets and websites including Huffington Post, Fidelity, Fox Business News, MSN and Yahoo Finance. She also founded the personal financial and motivational site www.AcetheJourney.com and translated into Spanish the book, Financial Advice for Blue Collar America by Kathryn B. Hauer, CFP. Ana teaches Spanish or English personal finance courses on behalf of the W!SE (Working In Support of Education) program has taught workshops for nonprofits in NYC.

Editorial policy

Our goal at Self is to provide readers with current and unbiased information on credit, financial health, and related topics. This content is based on research and other related articles from trusted sources. All content at Self is written by experienced contributors in the finance industry and reviewed by an accredited person(s).