An outstanding balance on a credit card is the total amount owed on the card at the time you check your account
. It includes purchases, cash advances, balance transfers, issuer fees, and interest that have posted to the account
. The outstanding balance is also known as the current balance
. This figure is a living number that can change daily due to new charges, payments, and other transactions
. The outstanding balance is important for several reasons:
- Determines how much credit is available : Your outstanding balance helps determine how much credit (money left to spend) you have on your credit card
- Affects credit score : Paying the outstanding balance can help you avoid long-term credit damage, as credit bureaus may consider outstanding balances when calculating your credit score
- Incurs interest charges : If you don't pay the outstanding balance by the due date, you may incur interest charges on the remaining balance
To pay off your credit card, you can either pay the outstanding balance or the statement balance, depending on the type of credit card you have
. Paying the outstanding balance ensures that you completely pay off your credit card bill and avoid interest charges
