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What is a Billing Cycle?

Credit card bills typically are paid on a cycle of 30 days on the same day of each month.
It is important to track billing cycles due to the interest that accrues if payments are not made on time.
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  • Written By: Mary McMahon
  • Edited By: Bronwyn Harris
  • Last Modified Date: 19 March 2014
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A billing cycle is an interval between bills for products and services. Typically, this interval lasts for one month, and consumers may be able to adjust the timing of their bills to meet their economic needs, depending on the company. These cycles are used to calculate things like interest and account standing, and they are an important part of the financial world.

In the example of services, a company like an cell phone provider might start offering service on the sixth of the month, and bill on the sixth of each month after that. Each bill will include a note specifying which cycle is covered by the bill, so that consumers can understand when and why various charges might have been incurred. Products may be billed in a similar way; a consumer may be given 30 days to pay for something, for example, and many retailers rely on a credit system with the wholesalers who send them products.

Many people are also familiar with the concept in terms of financial accounts like credit cards. In the case of a credit card, consumers are charged interest on outstanding transactions from past cycles, and they may be charged for failing to pay on an account in a timely fashion, or paying less than the minimum. People should keep a close eye on credit card billing cycles, since they can sometimes change without notice, causing consumers to incur unexpected financial charges.

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In some cases, a company will adjust its billing cycle to meet the needs of clients. If, for example, someone gets paid on the first of the month, he or she may request a cycle that runs from the 15th through the 15th, to ensure that bills can be paid on time. The period between billings may also be adjusted to meet the needs of bookkeepers and other company staff who specialize in financial matters for large companies, to ensure that financial staff are not swamped with bills at any particular period of the month.

Individuals who are trying to pay down debt and keep their bills organized should consider synchronizing their billing cycles to a day that is convenient. This can ensure that people never miss a bill, because they can pay their bills all at once. It may also help keep the person's finances organized, because he or she can keep track of the lump sum required to pay all the bills, rather than paying them sporadically throughout the month as they arrive.

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Discuss this Article

anon321149
Post 5

What are billing days?

anon102840
Post 4

My billing date for Capital one Visa was changed from the 17th of the month to the 21st. I pay on time and sometimes I pay extra the end of the month. I think they are trying to prevent me from paying extra so I can pay on the credit card for many years to come.

Hunnee
Post 2

I have the same situation. Is it legal for them to do this?

tallee
Post 1

My question is in regards to whether the billing cycle on credit cards fluctuates up to 33 days.

I haven't made any purchases on this credit card upon the initial purchase, I've paid on time, never been late and pay atleast a couple of dollars over minimum payment even when it drops.

I feel this is a way of them accruing more interest on my outstanding balance.

Is this normal for a 32-33 billing cycle and what would you advise me to do?

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