What is a credit card balance? - Bankrate (2024)

When you read your credit card statement, one of the most important lines to take note of is your balance. Keeping track of your balance is essential for managing your credit card usage and paying off your debt.

What is a credit card balance?

A credit card balance is the amount of money you owe your credit card company at any given time. The charges you’ve made to the card and cash advances you’ve taken out all add to your balance. This also includes any interest and fees the credit card company charges you.

If you transfer a balance from another account, the amount that you’re transferring plus any fees get added to your card’s balance, too.

Your balance changes as you use your card. Putting a purchase on your card causes your balance to go up, while paying your credit card bill makes the balance go down.

When you log into your credit card account online or through a mobile app, you’ll likely see two balances: a statement balance and the current balance.

Your statement balance is the amount you owe at the end of a billing cycle, and your current balance is the amount you owe right now.

What does it mean to carry a balance?

If you don’t pay the full amount of your balance by the statement due date, the amount you still owe carries over to the next billing cycle. You’re usually charged interest when this happens. Then, when your next statement is created, you owe the amount that was carried over along with the interest, as well as any new charges.

Carrying a balance usually isn’t a good idea. For one thing, it can be expensive. You have until your payment is due to pay your full balance and avoid being charged interest. This is called your grace period. If you don’t pay the entire balance by the due date, you’ll start incurring interest on the portion you didn’t pay.

What is a negative credit card balance?

If your balance is a negative number, the credit card company owes you money. This can happen if you get a refund for a purchase or if the credit card company applies a statement credit, such as cash back from a rewards program, to your account. Paying the credit card company more than the current amount you owe can also result in your balance being less than zero.

A negative balance means you can charge more than your limit to your credit card. For example, if you had a balance of -$100 and your credit limit is $2,500, you’d technically be able to charge $2,600 (although maxing out your card is never a good idea). Your account would then show a balance of $2,500. The limit your credit card company set for the card wouldn’t change, though. In this case, once you have a positive balance again, your limit will still be $2,500.

You can ask your credit card company to write you a check for a negative balance or to deposit the money it owes you in your bank account. Alternatively, you can just continue to make charges to the card, which will offset the negative balance.

How to check your credit card balance

You can find your balance through your account on the credit card issuer’s website or with its mobile app. If you haven’t managed your account online before, you’ll need to set up a username and password. If you already have login details, just enter them when prompted. You’ll be able to view your current balance and recent activity on the card.

You can check your credit card balance by phone; locate the phone number on your credit card or statement. Be ready to provide information about your account and to verify your identity. You’ll be able to choose from a menu of options, one of which may be to hear your current balance and other account details.

You can also see your balance on your credit card statement in the mail. However, keep in mind that this won’t necessarily reflect your current balance but your balance when the statement was created.

It’s easy to forget to check your balance regularly, but automatic notifications can help you keep track of it. On your credit card company’s website or app, select alerts or notifications. Generally, you can choose from email, text or push notifications to tell you what your balance is each week or to let you know when your balance is close to your credit limit.

The bottom line

Understanding your credit card balance can make it easier to manage existing debt. Once you familiarize yourself with your credit card statement, establish goals for yourself. Your goals may include paying your balance off in full each month and keeping your credit utilization below 30 percent. All in all, you will be on your way toward building strong credit health.

What is a credit card balance? - Bankrate (2024)

FAQs

What is a credit card balance? - Bankrate? ›

Whatever you spend on the credit card adds to your balance and could owe interest charges as well. The interest you're charged, commonly shown as your annual percentage rate (APR) can lead to debt if you continuously spend more than you can pay off each month.

What does a credit card balance mean? ›

A credit card balance is the amount of credit you've used on your card, which includes charges made, balances transferred and cash advances (like ATM withdrawals). You can think of it as the amount of money owed back to the credit card issuer. If you don't owe a balance, it will appear as zero.

What does a credit bank balance mean? ›

The credit balance of bank account indicates amount payable to the bank. Credit balance of bank account means bank overdraft and it comes on balance sheet under liabilities or assets side but with minus sign.

Is credit card balance the same as debt? ›

Unlike credit, which is money that is available for you to borrow, debt is money you've already borrowed but haven't yet paid back. Credit is merely the ability to acquire debt. If you use your credit card to make a $50 purchase, you're adding $50 in debt.

Why do people carry a credit card balance? ›

Carrying a balance on a credit card is never ideal, but it can help you in a financial pinch. You might find that you have to carry a credit card balance when you: Need to cover medical bills: You might have to pay off an emergency medical bill and decide your best course of action is putting it on your credit card.

Is credit card balance the same as statement balance? ›

A statement balance is the amount that's due at the end of a billing cycle, while your current balance is your total balance as of today.

Does credit balance mean I owe money? ›

A negative credit card balance, also known as a credit balance, means that your card issuer owes you money. A negative balance is created when you pay more toward the account than you owe. Here are some scenarios that could result in a credit balance: You overpaid your bill.

What is the difference between a debt balance and a credit balance? ›

Debit represents the left side of an account and denotes an increase in assets and expenses or a decrease in liabilities and equity. Credit represents the right side of an account and denotes an increase in liabilities and equity or a decrease in assets and expenses.

What is an example of a credit balance? ›

Examples. Bank Account: If your checking account shows a credit balance of $5,000, it means you have $5,000 available to spend or withdraw. Credit Card: If your credit card statement shows a credit balance of $100, you have a positive balance of $100.

How to read a credit card balance? ›

Your statement balance shows how much you owe on the last day of the billing cycle. It includes all charges that have been posted before your account's closing date. Your statement balance is usually listed several times within the document, typically in the summary of account activity and payment information sections.

How many people have $50,000 in credit card debt? ›

Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year. Paying off that bill?

Do credit card companies hate when you pay in full? ›

While the term “deadbeat” generally carries a negative connotation, when it comes to the credit card industry, you should consider it a compliment. Card issuers refer to customers as deadbeats if they pay off their balance in full each month, avoiding interest charges and fees on their accounts.

Is it bad to have a zero balance on your credit card? ›

Keeping a zero balance is a sign that you're being responsible with the credit extended to you. As long as you keep utilization low and continue on-time payments with a zero balance, there's a good chance you'll see your credit score rise, as well.

Does balance mean how much I owe? ›

Your credit card balance is the total that you owe today. As such, it's also called your current balance. This figure is different from your statement balance, which is the amount that is reflected on your bill.

Is it better to have a balance or no balance on credit card? ›

An active card can help your credit, but a zero balance is best for your score. June 6, 2024, at 12:06 p.m. Not paying your credit card balance in full will negatively impact your credit score and force you to pay interest.

What should my credit card balance be? ›

Most credit experts advise keeping your credit utilization below 30 percent, especially if you want to maintain a good credit score. This means if you have $10,000 in available credit, your outstanding balances should not exceed $3,000.

Why does my credit card show a balance? ›

Your statement balance typically shows what you owe on your credit card at the end of your last billing cycle. Your current balance, however, will typically reflect the total amount that you owe at any given moment.

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