What Is a Billing Cycle?

Woman paying bills
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The billing cycle for a credit card or any type of monthly account is the period of time between billings. For example, a billing cycle may start on the 1st day of the month and end on the 30th day of the month. Or, it may go from the 15th of one month to the 15th of the next. Billing cycles are varying lengths, ranging from 20 to 45 days, depending on the credit card and the issuer.

The Credit Card Billing Cycle

A newly opened credit card account usually starts the first day of the first billing cycle with a zero balance.

(The exception is when you're charged upfront fees for the account or you opted to transfer a balance when you applied for the credit card.) During the billing cycle, any purchases, credits, fees, and finance charges are posted to your account and added or subtracted from your balance. Then, at the end of the billing cycle, you are billed for all unpaid charges and fees made during the billing cycle. Any activity on your account after the billing cycle ends will appear on your next billing statement.

Your next billing cycle will start with whatever balance was left unpaid at the end of the previous billing cycle. Then, when your next billing statement comes in the mail, it will only include the transactions made to your account during that particular billing cycle. If you've ever had to go back and look at previous billing statements to find a transaction, that's why.

Your credit card payment due date is generally about 21-25 days after your billing cycle ends.

This means you're not required to send payment for purchases until the very next billing cycle after you've made them. There's a period of time between your billing cycle end date (which is also your account statement closing date) and your bill due date is known as the grace period. You can typically pay your balance in full before the end of the grace period to avoid paying interest on your balance as long as you paid your last statement balance in full last month.

Note that, by law, your credit card due date must fall on the same date every month and does not have an impact on the start and end date of your billing cycle. Check your credit card statement or call your credit card customer service for the length of your billing cycle.

Billing Cycles and Introductory Rates

Many credit card issuers offer introductory rates that last a certain number of billing cycles rather than months. The result is actually a shorter introductory period since billing cycles are usually shorter than a full month. For example, an introductory rate lasting 12 billing cycles would actually be around 10 months, assuming a 25-day billing cycle. An 18-billing cycle introductory rate would be around 15 months. It's important to keep track of the billing cycles as they pass so you know when your introductory rate will expire.