The Credit Statement Cycle and Reporting Date - one of the most complicated components to credit when in the beginning of your credit education.
The credit statement cycle is basically a one month period in which you spend money on a card for approximately 30 days, then 12-20 days later, you pay the bill.
The bill will show your Statement Balance - this is the total amount you spent in that given cycle, let's say from the 1st - 30th of the month. The statement may show the following:
Statement Balance - $1,000
Minimum Amount Due - $25
That is the very moment and place where most Americans get into trouble. They see the minimum amount due and only pay that, and that is where credit card debt and high interest rates come into play.
What people should do is develop the discipline to only put on a credit card what they can afford to pay at the end of the month. This way, their balances never run away from them and they never pay credit card interest (US Average - 17%). Credit Card Interest being the cancer of consumer finances.
Also, it is extremely important to realize that ever account has what is called a reporting date. That is the date that the Credit Card Company reports to the credit bureaus. This typically takes place at the end of the statement cycle.
It is extremely important to understand the reporting date for each account and make sure to pay that card down to $0-10 three days before the reporting date. This will ensure your balance is low which will result in a Low Credit Utilization Factor.
Credit Utilization accounts for 30% of your score and is one of the leading causes for low credit scores.
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