What is the purpose of cycle billing?

Cycle billing serves the primary purpose of simplifying the management of billing cycles for cardholders. This approach allows for statements to be prepared at regular intervals, typically aligned with the cardholder's individual usage patterns. By doing this, financial institutions can provide more manageable and predictable billing experiences, leading to better cash flow and customer satisfaction.

This method plays a significant role in maintaining clear communication with cardholders, as they receive timely updates on their balances, payments, and accumulated charges. It helps in ensuring that customers are well-informed about their account activity, which enhances their ability to manage their finances effectively.

The other options do not align with the core function of cycle billing. For instance, while preventing fraudulent transactions is crucial for any transaction processing system, it does not relate to the billing process directly. Similarly, classifying customer complaints and monitoring cybersecurity threats are important operational areas but are not directly connected to the cycle billing mechanism itself.