While some people may know it as a current balance, others know it as an outstanding balance. Whichever one you decide to call it, it means the same thing. It represents the sum of all unpaid credit card balances within a billing cycle.
Some of the transactions that make up the outstanding balance include cash advance, purchases of all kinds, cash advance, and even transfers. A glimpse at the outstanding balance reveals the state of your standing when it comes to your finances.
Each time you make use of your card, the amount on your outstanding balance changes. This is because your outstanding balance shows the total amount you are owing.
For instance, let’s say that your outstanding balance as of the 10th of April was $500. If you use your credit card to shop in Walmart and charge the $150 to your credit card, your outstanding balance will automatically change to $650.
The amount reflecting on your outstanding balance helps you know the credit that you can access per time. You may be wondering how but you can get your credit limit from your outstanding balance.
Simply remove or subtract the outstanding balance from the credit limit that is available to you. When you have done that, add other items that you have charged to your credit card that are yet to show in your account.
What does Statement Balance mean?
A statement balance shows all the money that has been charged to the credit card no matter the billing cycle. The amount on your statement balance will differ as you continue to make transactions from one billing cycle to another.
To ensure that you don’t pay high interest, try as much as possible to clear your statement balance on or before the date. When you pay on time, you will also avoid being fined for late payment.
Statement Balance vs. Current Balance
Most times, you won’t even be able to notice the difference. This most especially, if you don’t check your credit card balances every day.
When you check the information on your credit card account only when you receive your monthly statement, you will notice that the balances are the same. This will be the case if you cleared your balances at the end of the billing cycle.
On the other hand, if you were unable to pay some amount of money in any of the billing cycles, it will be carried over. As you continue to use your credit card, you will observe that your outstanding balance will keep rising.
However, the amount on your statement balance will remain the same. The reason for this is because it only shows the amount you are owing in a particular billing cycle.
There will always be a difference between the statement balance and the outstanding balance. You may only notice this difference when you go through your credit card account.
If you are using a credit card, try as much as possible to clear the balance at the end of each billing cycle. This will help to ensure that you maintain a good credit rating. Paying on time also protects you against high interest payments.