Statement Balance vs. Account Balance

credit cards

Credit cards are pretty sophisticated financial instruments. What this means is that one must be responsible if they wish to carry a credit card in their wallet.

The seemingly innocuous pieces of plastic can get you into trouble if you aren’t careful, and the last thing you want is a missed credit card payment.

Aside from being slapped with a nasty late fee, your credit score could also take a hit if the payment is more than 30 days late.

[See: The impact of missed credit card payment for more on that.]

Late payments aside, when it does come time to make your credit card payment, it can get pretty confusing, seeing that there are usually multiple payment options.

Apart from making the minimum payment, which is never really recommended, there is typically the option to pay your “statement balance” or your “account balance.” So what’s the difference between the two?

Statement Balance

  • Your statement balance includes new charges for a given period
  • Plus any fees and interest
  • Less any credits or payments applied
  • It is what must be paid in full to avoid additional finance charges

Your statement balance is the total amount of charges (purchases and cash advances), plus any fees or interest, less any credits or payments.

For example, if you just opened a new credit card, and made $500 in purchases during the first billing cycle (typically one month), your statement balance would be $500.

In order to avoid paying any finance charges (interest), you’d have to pay that entire $500 by your credit card due date.

Alternatively, you could make just the minimum payment, but interest would accrue on the remainder of the balance until it was paid off, assuming the APR is greater than 0%.

Now let’s assume you have an outstanding balance from a prior billing cycle. For example, if you only made the $25 minimum payment on the $500 balance, your new balance would be $475.

If you charged another $500 the following month, your new statement balance would be the total of $500 in purchases, $475 in previous balances, and whatever the interest is on that $475 carried over.

[Should you pay off your credit card in full each month?]

To avoid paying additional interest, you must pay the entire outstanding balance by the due date.

FYI: If you pay your American Express credit card bill online, your statement balance is actually known as your current balance, which is adjusted for payments, credits, and disputes since your most recent statement closing date. Yes, it’s confusing…

Account Balance

  • Your account balance is essentially your total outstanding balance
  • Including any and all charges, fees, interest, etc.
  • And any activity since your last statement period ended
  • Everything other than the new activity must be paid in full by the due date to avoid additional finance charges

Your account balance, also referred to as your current balance, is the total balance on your account, including any activity since your last statement.

That last bit of the definition is probably the best way to differentiate the pair.

It is also known as your “outstanding balance” by American Express, or sometimes simply “balance” by companies like Capital One.

Once your billing cycle ends and another starts, your current balance will include both your statement balance and new activity that has not yet been billed.

So if you continue to use your credit card during the next billing cycle, your current balance will be the sum of the statement balance and any new purchases.

For example, if you opened a new credit card and made $500 in purchases during your initial billing cycle, your first statement balance would be $500.

You would then have a grace period of X amount of days to make a payment. During that time, if you made another $200 in purchases, your current balance would grow to $700.

That entire $700 isn’t actually due right away, only the $500 from the original statement balance. The remaining $200 would be part of your following statement.

Your current or outstanding balance is more up to date because it includes everything, including new purchases and recent payments.

However, it can get even more complicated because your outstanding balance often doesn’t include pending transactions.

These may have been made, but have yet to post to your account. Sometimes purchases can take a few days to actually reflect in your current/outstanding balance, so don’t get too excited; your balance may wind up being higher than you think.

By Colin Robertson

Colin created this blog after spending several years in a job that required him to scour credit reports on a daily basis. His goal is to help individuals better understand their credit and get the most out of credit cards.


  1. Credit card issuers should make these definitions more distinct and clear. Every time I go to pay my credit card each month, I have to carefully choose the right one. They should have something next to the statement balance that says, “Pay this to avoid any interest.” Or something similar.

  2. Makes sense, but it’s not that simple if a cardholder has an existing balance. But it would certainly help if all the different credit card issuers used the same terminology.

  3. I had a strange thing happen recently. My statement balance was HIGHER than my outstanding balance because I redeemed some American Express cash back, which was applied to my outstanding balance, not my statement balance. I figured Amex would reduce my statement balance, but that was not the case. I still owe full payment from the prior month’s purchases.

  4. Right, they apply cash rewards to your latest billing cycle so you still owe the full amount of the previous statement.

  5. I think they make it confusing on purpose with all their different names like current balance and outstanding balance. How about statement balance and current balance.

Leave a comment

Your email address will not be published. Required fields are marked *