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What is a Credit Card Balance?

6 min read

Last Updated: February 5, 2025

Table of contents

Key Takeaways

Your credit card balance is what you owe your credit card company at any given time, excluding pending charges.
Your statement balance is the amount you owe at the close of your billing cycle and may differ from your current balance.
Your credit card balance includes transactions, interest, and fees since your last statement, plus any unpaid amount from your previous statement.

Your credit card balance is a figure worth understanding. Put plainly, your credit card balance is the amount you owe your credit card issuer at the time you check it.

But there’s more to it than that, and knowing what goes into your credit card balance can help you stay on top of your credit card debt. When you know the ins and outs of your credit card balance and how to manage it, you can make smarter financial decisions.

How is your credit card balance calculated?

Your credit card balance is the sum of all the activity that has posted to your account at a given moment in time. The factors that may affect your balance include:

Purchases
Payments
Annual fees
Interest charges
Balance transfers from other cards
Balance transfer fees
Foreign transaction fees
Cash advance fees
Penalties, like late payment charges

Your current balance won’t reflect pending payments or transactions. You can expect your credit card balance to fluctuate, increasing with charges and decreasing with payments.

How do you check your credit card balance?

You can typically check your current credit card balance by contacting your credit card issuer, checking your mobile banking app, or logging into your online banking portal. Checking your credit card balances often can help you make informed spending decisions, especially if you’re considering a big purchase. If you’re carrying a high balance, you may want to avoid spending until you’ve paid your balance down.

How to pay your credit card balance

You may be able to make payments toward your credit card balance via mail. However, paying electronically through online banking or mobile banking is generally easier. You can either pay your credit card bill manually before the due date each month, or set up autopay if you’re paying down a significant balance.

Most credit card issuers require cardmembers to make at least a minimum monthly payment. You can use a credit card payoff calculator tool to determine how long it may take you to repay your balance by making the minimum payment. However, whenever possible, it’s best to repay your balance in full. That way, you can avoid an interest charge.

What is a current credit card balance vs. a statement balance?

Your credit card balance is different than your statement balance, which is the amount you owe at the close of your billing cycle (and documented on your monthly credit card bill). A billing cycle is a fixed period of time that covers the bill you’re sent. The bill will show new charges, interest, and fees, plus any payments you made during that time.

Your credit card issuer updates your statement balance once per month. However, your credit card balance will fluctuate daily based on payments and purchases.

It’s important to know that your credit card statement balance is the balance that’s subject to a minimum payment (also listed on your monthly billing statement) and interest. If you only pay the minimum payment by the due date, you’ll pay interest on the unpaid portion of your statement balance. The interest is based on your current credit card interest rate. But if you pay the statement balance in full by the payment due date, otherwise known as the grace period, you won’t pay interest on that month’s purchases.

How do statement credits impact your credit card balance?

Statement credits include redeemed rewards from a rewards credit card or refunds from purchases made with your card. Statement credits reduce your current balance but don’t count as credit card payments. You’re still responsible for making your minimum monthly payments.

Depending on your outstanding balance and total statement credits, you could end up with a negative credit card balance. For example, if you have a $100 balance and receive a $200 refund, you’ll have a negative balance of $100, which future charges would reconcile. You can also request a refund. The Consumer Financial Protection Bureau explains that, per the Truth in Lending Act, credit card issuers must provide a refund in the form of cash, a check, a money order, or bank deposit upon request.

What is a credit card balance vs. a credit limit?

Your credit limit is the total amount you can spend according to your credit card company. Your credit balance represents the portion of your credit limit in use—the higher your credit card balance, the lower your available credit.

Are you maxed out? If your credit card balance is equal to your credit limit, new charges may get declined until you pay down your balance. Nearing or reaching your credit limit impacts your credit utilization ratio (the percentage of available credit you’re using) and may lower your credit score.

Credit card issuers typically report your balances to at least one credit bureau. If your credit card has a high interest rate, you may have trouble repaying your balance, leading to credit card debt.

What is a balance transfer credit card?

A credit card balance transfer offer may help you get out of debt quicker and avoid taking out a personal loan. A balance transfer provides a way to move high-interest credit card debt to a credit card with a lower interest rate, saving you money on interest charges. Consolidating multiple credit card balances into one may also provide one lower monthly payment.

A credit card may also come with a balance transfer offer, like an introductory period of 0% interest. A period of no interest allows you to pay down your credit card balance without accumulating additional debt from interest (if done during the promotional period). However, credit card companies may charge a balance transfer fee, typically a small percentage of the total amount transferred.

If you plan to make a balance transfer, be mindful of the credit limit on your new balance transfer credit card. You’ll want to make sure the credit card limit is high enough to cover the balance you intend to transfer; otherwise, you may not be able to complete the transfer.

Did you know?

A balance transfer offer from Discover may be able to help you save money on interest.

Learn More

By understanding your credit card balance, you can better manage your debt. Now that you know what a credit card balance is, how it gets calculated, and how to pay it down, you can handle your credit card account more confidently.

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