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With a credit card, are you obliged to pay the statement balance or the current balance?

For the period ending Jan 12th I have a statement balance of $200 (payment due Jan 30th), on Jan 16th I received my annual cash-back reimbursement of $20. If I were to pay $180 to the credit card then my current balance would be $0. However, I would not have paid for all the expenses incurred during Dec 13th to Jan 12th window. I do not anticipate using this card further after this pay period, so I would like to avoid overpaying on the statement.

The bank associated with this credit card is Rogers Bank.

Am I required to pay $200 or $180 prior to the credit due date to avoid interest on this account?

  • "current balance" as in what you see when you log into the web site and it says "current balance"? – RonJohn Jan 17 at 19:25
  • If you charged $10,000 on your CC before end of a cycle and then got a $10,000 refunded on the same item in the new cycle, would you have to pay for it just cause the statement balance included the $10,000? I think not. – Viv Jan 17 at 19:49
  • All of the bonus dollar credit cards that I have used require that the credit be applied to the card before the statement period ends. If you pay the net amount owed before the credit hits your account, the card may charge you interest. On $20, it's meaningless other than being a nuisance (owing them a few cents). – Bob Baerker Jan 18 at 0:06
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Yes, you're required to pay the Minimum Payment Due. However, you're never required to pay more than the actual Balance Owed.

This may not make sense in the Internet age. But the concept of a Statement Balance is rooted in the tradition of mailing statements: That is why "billing cycles" exist.

Traditionally, you would be expected to keep track of credits like this. (including merchandise return credits, for instance). However, you can use all tools at your disposal to ascertain the balance actually owed, including the Internet, of course.

This would be a good time to reconcile the charges reported by the system with the charges that you know you made. Sometimes charges take awhile to post, because not every transaction involves real time data interchange. A classic example is if you settle up your Amtrak dining-car bill inside the Moffat tunnel.

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    Statement balance and billing cycles are not obsoleted by the Internet age though, because those are still how grace periods get applied. – Ben Voigt Jan 18 at 5:12
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If your current balance is $180, many banks won't let you pay $200. And, at any rate, from an obligation standpoint, a current balance of $180 means you owe $180, and once you've paid that off, you have no obligation. It doesn't matter if your statement says you owed $200 or $20,000; if the current balance is $180 you only need to pay $180. In other words: If you had a $200 balance, and you used $20 in rewards credits to reduce your balance to $180, you only need to pay $180 in order to reach a zero balance and fulfill your obligation to the bank.

The one partial caveat to this comes into play if you're carrying a balance from month to month and are only concerned with making the minimum payment in a specific month. If you are redeeming rewards credits towards your balance, most banks will not consider that as paid against the minimum - you still need to pay the entire minimum payment by the due date on the bill in order to satisfy the bank's requirement for a minimum payment. So if you have a large enough balance that you have a $200 minimum payment and you apply $20 in rewards, you still need to pay $200 that month.

Of course, as with all things related to credit cards, the official answer is: look at your cardholder agreement and call the bank if you want 100% confirmation on your responsibilities.

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  • What are they going to do? Mail your check back to you? – Harper - Reinstate Monica Jan 17 at 20:12
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    Sometimes yes. That's about what my credit union does - although they'd credit the account for the balance of $180 and then mail a $20 check back. Other banks will accept the money and create a positive balance (in the customer's favor) of $20, which is a little foolish unless you plan on using the card in the near future, since it's money that's just sitting without doing anything for anyone. Banks are required to refund positive balances on credit cards if they've sat unused for 6 months, at any rate. – dwizum Jan 17 at 20:19
  • @dwizum There’s a canada tag on the question. Is the 6-month positive-balance refund part of the legislation there? – Lawrence Jan 18 at 5:42
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It all depends on how you received the cash back reimbursement of $20. With some credit card companies, the website tells that you have $20 available as cash back and offers the options of (a) getting a check in the mail for $20, (b) having the money credited towards your credit card balance, (c) getting a gift card usable at a specific merchant's store (in some cases getting a bonus such as $20 cashback gets you a $25 gift card), and (d) doing nothing, which is useful when the cash back bonus is awarded more frequently than once a year and you can accumulate cashback award money till you have enough to get a $50 gift card for $40 in cask back award money, say.

In cases (a), (c), and (d), you owe the credit card company $200. In case (b) you owe the credit card company $180. If options (a)-(d) are not available and the cash back gets applied automatically to your credit card balance, then you need only pay the credit card company $180 by the due date shown on the statement to earn the status of "paid balance in full in timely fashion."

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I can only speak from my experience with various American credit cards (issued by U.S. Bank and Capital One). In cases where the current balance is less than the statement balance, paying the current balance will result in no interest charges. This makes sense because what amount could interest even be charged on if the current balance is $0 when the next statement is generated? Rewards redeemed as statement credit are typically treated like a payment or a refund, in that they reduce the statement balance, although when you are paying the statement balance will usually not be updated to reflect this. Discover makes it clear by allowing you to redeem rewards as statement credit during the payment process. I'll also note that often there is a disclaimer that rewards redeemed as a statement credit do not count toward the minimum payment.

If you had made more charges after the statement was generated, that would add a further wrinkle to the question, though I don't think it would change the answer. Ultimately this will come down to your bank and the agreement you have with them. But I think in the vast majority of cases, rewards redeemed as statement credit effectively reduce your statement balance.

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