 TITLE: How Credit Cards Work CONTENT: How Do Credit Card Balances and Payments Work?\n----------------------------------------------\nWhen you hear the phrase \"credit card balance,\" it can mean one of two things:\n*   **Current balance**: This indicates the current tally of charges on your card (plus any interest and fees). It's how much you owe on your card in total at any given time.\n*   **Statement balance**: This is how much money you owe at the end of each billing cycle. Credit cards only require you to make a minimum monthly payment; you are not required to pay the entire balance.\nCredit cards are billed on a monthly cycle. If you make purchases on the card and pay them off in full by your due date, you won't pay any interest on those transactions. However, if you can't pay them all off and carry a balance, the remaining balance rolls over and begins to accrue interest.\nWhen your monthly bill is due, you are only required to make a minimum payment in order to keep your account in good standing. However, you should try to pay off as much of your balance as you can; otherwise, interest fees can add up and make it harder to get out of debt.\nKeep in mind that you can also make a payment toward your credit card at any time—not just when your statement balance comes due. If paying small amounts over time works better for you than making one larger payment once a month, consider doing that instead.\nIf you're worried you may forget to pay, setting up an automatic payment for at least your minimum payment will help make sure you don't end up with a late payment in your credit report. Alerts can help too, whether they remind you to pay your bill or to prevent you from overspending by letting you know your balance has reached a certain amount. END