Billing period
Definition
A billing period is the interval of time between the dates on which a credit card statement is generated. It typically lasts about 30 days and determines the transactions that will appear on a statement.
5 Must Know Facts For Your Next Test
- Billing periods often align with calendar months but can start and end on any date set by the credit card issuer.
- Any purchases, payments, and interest charges made during the billing period will be reflected in that period's statement.
- The length of a billing period affects when payments are due and how long you have to pay off new charges before interest accrues.
- Understanding your billing period can help you manage your spending and avoid late fees.
- Credit card companies may offer grace periods after the billing period ends where no interest is charged if the balance is paid in full.
Review Questions
- What is a typical length for a billing period?
- How does understanding your billing period help in managing your finances?
- What happens to transactions made during a billing period?
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Related terms
Statement Date: The date when the credit card company generates your monthly bill.
Grace Period: The time frame after the billing period ends during which no interest is charged if the balance is paid in full.
Due Date: The deadline by which you must make at least the minimum payment to avoid late fees.
