There are 2 (monthly) dates and 3 amounts you need to understand on your credit card account.
The two dates are the statement close date and the payment due date.
The 3 amounts are, the statement balance, the current balance, and the minimum payment due. (There's also the credit limit and the amount available, which factor into utilization, but I won't cover that in this post).
To understand how it all works, let's look at an example of a couple months of credit card usage, starting when the account is opened. For this example, we'll assume the payment due date is on the 20th of the month and the statement close date on the 23rd. Usually the statement close date falls 3-4 days after the due date, so an on time payment appears on the following statement.
Let's start at August 1, with a $0 balance. Assuming a new account, the first statement close date is on August 23. The first payment will be due September 20.
So, between 8/1 and 8/23 let's say you use the card for a total of $200 in charges. The statement closes on the 23rd with a $200 balance. Sometime after that date you'll get your first statement, either online or in the mail. On that statement will show your transactions for that billing cycle (the charges you made) and the statement balance of $200. The amount due will be the minimum payment due which is usually the higher of a minimum amount like $25 or a percentage of the balance. For this statement we'll say the minimum payment due is $25.
Now, you have approximately 25 days to make your payment. During that time, you will probably continue using the card, increasing its balance. (Let's say you put another $250 on the card between 8/23 and 9/20), so now you have a total balance of $450. If you pay the card on the due date, you can pay any amount from the minimum due ($25), up to the current balance of $450. So, how much should you pay?
To avoid interest, you should pay at least the statement balance of $200. You must pay at least the minimum amount due of $25 by the due date to avoid late fees and dings on your credit report. But you could also choose to pay more, up to the $450 balance. Why? To reduce the balance reported on your credit report (and thus your utilization), or to free up the credit line for future use (people with small limits tend to do this more often).
So, on 9/20 you need to pay at least $25, but you'll get hit with interest unless you pay at least the $200 statement balance. The remaining balance of $250 from newer charges will appear on the next statement and apply to that statement's balance, so you'll have a bill for $250 (or more if you made more charges between 9/20 and 9/23), with a due date of 10/20. Once again, you'll have to pay at least the minimum amount due, or preferably the statement balance to avoid interest (here we call this PIF, Pay In Full)... or you could choose to pay the current balance to "zero out" the card (called PTZ, or Pay To Zero)... or any amount in between.
If you choose to pay to zero (or to a low balance) to control reported utilization, I usually pay a few days ahead of the due date, the current balance of the card. Then I avoid using the card (or use a different card with a different due date) during the time in between the payment posting and the statement closing, so I don't cause the reported balance to report higher. Another option is to pay at least the statement balance before the due date, then pay the rest the day before statement closing.
