Previous balance is the total outstanding amount on a credit card account at the beginning of a new billing cycle — representing the unpaid balance carried forward from the previous statement period after accounting for payments made and credits received. It is the starting point from which the current cycle's new purchases, cash advances, finance charges, fees, and payment credits are added or subtracted to arrive at the current statement balance. In India, credit card statements typically display: the previous statement balance, payments received since the last statement, new purchases and transactions during the current billing cycle, interest and finance charges accrued on the previous balance, fees charged, and the resulting new balance. If the full previous balance was paid by the due date, no interest is charged on that amount and the grace period (typically 18 to 48 days) applies to new purchases. If only the minimum payment was made, the remaining previous balance attracts interest at the full credit card rate (36% to 48% per annum) from the transaction date — not just from the due date — making partial payment of previous balances significantly more expensive than consumers often realise. For financially disciplined Indian credit card users, ensuring the previous balance is paid in full each month eliminates all interest charges and maintains the interest-free credit cycle that makes credit cards a valuable cash flow management tool when used responsibly rather than a high-cost revolving debt instrument.
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