What Is the Meaning of "Closing Date" for Credit Cards?

When Does The Credit Card Closing Date Mean In A Credit Card Account?

The closing date is the end of your credit card bi

The closing date is the end of your credit card billing cycle. You can find the exact closing date for your card and the length of the cycle on your recent statements. Any purchases after the date will apply to next month’s statement. After the closing date, you will be given 21 days grace period to pay off your card. If you manage to clear the outstanding balance, then interest will not be applied to your card. 

You can use the grace period to reduce the interest due, which will be applied after.  However, the balance on the closing date will be forwarded to credit bureaus which contribute to your overall credit scores. 

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Whats a Credit Card Closing Date?

Now, you have a better idea of the terms you’ll encounter when looking at your billing statement. As mentioned above, one of them is the statement closing date.

Knowing exactly what this common – and crucial – term means is key to proper credit management. So… What exactly does this mean? And how does it affect you and your bills?

First off, a credit card closing date is one of the most important dates you need to always pay attention to. Forgetting about it can lead to delays in your payment. And when this happens, you can expect your credit score to take a hit.

Let’s break this date down for easier understanding.

The Billing Cycle’s Final Day

Basically, the closing date is your billing cycle’s last day. It’s during this time that your credit card issuer calculates and adds the finance charges to your balance. This also includes all purchases and other transactions you made between the last closing date and the current one.

One reason to be careful when it comes to closing dates is that most billing statements don’t tell you the next closing date. It’s easy to figure out though. Just add your next billing cycle’s number of days to your last closing date. Again, you’ll find the recent closing date on the current bill you just got.

Here’s an example:

Your previous statement showed that your closing date is May 01. Your billing cycle has 29 days. Add 29 days to your closing date, and this means that your upcoming closing date will be on the 30th of May.

This means that you’ll find each transaction you make between May 02nd and May 30th reflected on your next billing statement.

It’s Not the Payment Due Date

Remember, the closing date isn’t the payment due date. It’s not the date when you should pay your minimum payment. Actually, you have a few more days after the closing date to make the minimum payment and still get it done on time.

Most credit card companies inform the three credit bureaus on the closing dates of their cardholders. Knowing this date is vital, especially if you’re aiming to maintain low reported balances. This is an effective way to boost your credit score, particularly if you want to raise your chances of qualifying for a big loan.

In this case, you want to pay your balance down prior to the closing date. This way, a lower balance shows up on your next credit report. Doing this should boost or maintain your scores since credit utilization is calculated at 30%.

Bottom Line

Trying to figure out the best time to pay off your credit card? To avoid paying interest and late fees, you’ll need to pay your bill by the due date. But if you want to improve your credit score, the best time to make a payment is probably before your statement closing date, whenever your debt-to-credit ratio begins to climb too high.

How your credit cards due date and closing date are determined

Since the Credit CARD Act of 2009 took effect, credit card issuers have been required to have the due date land on the same date each month so users know that they can make their payment on a particular date and always have it credited on time. For example, if your statement is due on March 15, then it will also be due on April 15, May 15, June 15 and so on. You can ask your credit card issuer to adjust your due date. Some banks allow you to make this request online when logged into your account, while others will require a phone call or chat session.

Know that by choosing your due date, you’ll be altering your statement closing date as well.

Related: The history of credit cards 

Because the due date is a fixed date of the month, and it has to occur a set number of days after the statement closing date, the statement closing date can’t be fixed as well. The closing date will also likely be the month before the due date because there is an approximate three-week grace period before payment is due.

Related: Tip: Amex’s ‘Please Pay By’ date isn’t the same as your payment due date

Since months vary from 28 to 31 days, your statement closing date will vary by a few days on shorter months. For example, if your due date is on Aug. 15, and your account has a 25-day grace period, then your statement closes 25 days earlier on July 21.

What Happens After a Credit Card Expires

After a credit card expires, it will no longer be possible to use it to make purchases—either in-store or online.

Most credit card issuers automatically mail cardholders a replacement card 30 to 60 days before the card’s expiration date. The new card will have a new expiration date and new CVV security code. Unless the account is upgraded or product changed, the credit card number usually stays the same.

An issuer might send a letter asking the cardholder if they’d like to renew. The card issuer has the right to reevaluate an account before they send out a new card. This might happen if the cardholder is in poor standing, in which case the issuer may decide to terminate the relationship (and not send a new card as a result).

Old credit cards should be destroyed or recycled. Some experts recommend shredding old credit cards to protect the credit card number from falling into nefarious hands. Cutting the card into small bits before tossing into the trash works just as well. Recycling the special plastic used for credit cards (called PVC) with a recycler like Earthworks System offers a great way to help keep waste down. Metal cards should be sent back to the bank for recycling in the special envelope that is provided when the new card arrives. You can also request an envelope via phone or online chat.

Changing your credit card

That bold due date on your credit card account statement may leave you thinking it's set in stone, but it's not. Your credit card company may be willing to shift your due date to a more convenient day of the month, like your payday. 

You can log in to your credit card's online interface to see if there is an option to change the due date. If there's no online option, you can call the customer service number on the back of your credit card and tell the representative you'd like to change the due date. 

Keep in mind that not all credit card companies will allow due date changes, and those that do will have rules limiting the changes you can make. They also generally won't allow you to skip a payment by changing your due date.

Closing a Card With a Balance

If you’re carrying a balance on a card and want to close it, it’s best to pay off the debt first. We recommend the avalanche method.

You don’t need to close your card just because it has a high interest rate, though. You could consider transferring the balance to another card with a lower interest rate. Some cards are designed for this purpose, with a long 0% introductory APR on balance transfers.

When you transfer a balance, there’s no need to close the card you transfer a balance away from — as long as it has no annual fee you’re probably better off leaving it open with a $0 balance and not using it.

Reviewing Your Statement

Your statement is mailed out immediately after the closing date. Review this document carefully when it comes to you. Note all transactions made since the previous closing date and make sure they are all legitimate purchases that you’ve made. If there are any discrepancies or unknown purchases, contact your credit card company immediately.

What to do when you get a new card

Whatever the reason for receiving a new card, it’s a good idea to sign the new card as soon as you get it, and destroy the old card once the new card has been set up and activated. Different card providers have different ways of setting up and activating cards, but they should give you clear instructions on how to do this with your card.

If your new card is replacing an expired or damaged card, your PIN will usually stay the same. If your new card is replacing a lost or stolen card, you may be sent a new PIN (in a separate envelope) to activate your new card. Again, your card issuer will provide clear instructions on this matter.

When you get a new card, you will have to update any direct debits coming off that card. If your card details have remained the same, there is no need to do this, but if your card number or expiry date has changed, you will need to contact the companies who receive direct debits from that card to give them the updated information.

This could include your mobile phone provider, your utilities providers, and your landlord. If you don’t update your direct debit details, the payments could be rejected, which could result in you receiving fees and penalties for missed payments.

What happens when a card expires?

If you’re worried about your credit card expiring, you don’t have to be. Your card issuer is probably handling the process in the background.

Shortly before your card’s expiration date, the issuer should automatically send you a new card in the mail. This card will usually come in a plain envelope to help protect against theft. Make sure you’re on the lookout so that you don’t accidentally throw away your new card!

When you receive the new card, you’ll typically be free to activate it and start using it right away — you don’t usually have to wait for the old card to expire.

If you’re only getting a replacement card and aren’t otherwise making changes to your account you shouldn’t need to worry about a hard inquiry.

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Why Credit Cards Expire

It may seem strange to renew a credit card every few years, especially if it hasn’t been wallet-worn, but credit card issuers have a few incentives to keep up with this practice.

  1. The card may experience normal wear and tear. The magnetic bar on the back of a credit card may rub off over time or become less effective. The card’s plastic may also chip or fall apart. Receiving a new card every few years is a surefire way to prevent any inconvenient purchase disruptions.
  2. The expiration date is a vital anti-fraud security measure. Combined with the CVV code on the back of a card, the expiration date prevents people who have gained access to only the credit card number from making fraudulent purchases.
  3. It’s an opportunity for credit card companies to renew their inventory. New card technology like chips or updated card designs, benefit both the issuer and the customer. Both can be sure that the cardholder is using the most up-to-date version of the issuer’s credit cards with maximum security and updated technology.
  4. It’s a marketing opportunity for the credit card company. Sometimes the card issuer will take it upon themselves to upsell the customer with a fancy upgraded account. They may notify a customer of new deals, which could lead the customer to sign up for an entirely new account in addition to an old one. It’s also an excuse for the issuer to remind an inactive customer of a forgotten card that an issuer may feel needs more love and affection.

Bottom Line

Card expirations give you not only a shiny new card in the mail, they give you protection against hassle and fraud. Be sure to activate your new card right away, and be sure to destroy your old card after you do so.

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