Legal Definitions - billing cycle

A billing cycle refers to the recurring timeframe over which a company tracks a customer's purchases or service usage before generating and sending out an invoice or statement. It's the defined interval between one bill and the next, during which all charges are accumulated.

Here are some examples to illustrate the concept of a billing cycle:

• Credit Card Statement: When you use a credit card, your bank sets a specific billing cycle, perhaps from the 5th of one month to the 4th of the next. All purchases, payments, and interest charges that occur within this particular 30-day period are compiled onto a single statement. Once the cycle ends, the bank generates your bill, and a new billing cycle immediately begins for the subsequent month's transactions.

• Utility Services: Your electricity provider typically operates on a monthly billing cycle. For instance, they might measure your electricity consumption from January 10th to February 9th. At the end of this period, they calculate your usage and generate a bill. This specific January 10th to February 9th timeframe constitutes one billing cycle, and a new one starts on February 10th for the next month's usage.

• Online Subscription Service: If you subscribe to an online streaming platform, your billing cycle might be set to renew on the 20th of every month. This means that from the 20th of one month to the 19th of the next, you have access to the service, and your payment method is charged at the start of each new cycle (on the 20th). Each of these monthly periods represents a distinct billing cycle for your subscription.