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What is an outstanding balance on a credit card?

Find out how an outstanding balance differs from other balances and how much you should pay


An outstanding balance is the total amount you owe on your credit card, which includes balance transfers and purchase transactions.

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Understanding your credit card statement can be a bit of a balancing act because the statement lists more than one balance. And one of those is known as an outstanding balance.

So, what is an outstanding balance and how does it differ from other balances that pop up on your credit card statement? Keep reading to learn more about credit card balances.

What is an outstanding balance on a credit card?

An outstanding balance, also known as a current balance, refers to the total unpaid amount on your credit card. This includes purchases, balance transferscash advances, interest charges and fees. Your outstanding balance serves as a real-time snapshot of your credit card account.

The outstanding balance changes every time you use your card, even from one minute to the next. For instance, if you charge a $75 dinner, that purchase will become part of the outstanding balance once the transaction is posted to your account.

The outstanding balance helps determine how much credit you have available at a given time. To come up with your available credit, subtract the outstanding balance from your credit limit and add any outstanding charges that haven’t shown up yet in your account.

So, let’s say your outstanding balance is $1,500 and your credit limit is $5,000, and there’s a pending transaction of $200 that hasn’t appeared on your account yet. At that moment, your available credit is $3,300 ($5,000 subtracted by $1,500 and $200 = $3,300).

Where do you find your outstanding balance? Just log into your account online or mobile app, or contact your card issuer’s customer service.

How does outstanding balance differ from current balance?

Even though the names are different, outstanding balance and current balance mean the same thing.

How does outstanding balance differ from statement balance?

Here is how your outstanding balance differs from your statement balance:

  • Your statement balance is the amount you owe at the end of a billing cycle (and reflects all of the purchases, interest charges, fees and other items that accrued during the most recent cycle), whereas your current balance is the entire amount you owe at a particular moment, which may include any unpaid balances from previous months.
  • A statement balance might also be shown as a monthly balance or a new balance. This dollar amount may or may not be the same as the outstanding balance.
  • The billing cycle is the specific time period between billing statements. So, one billing cycle might run from May 9 (the opening date) to June 8 (the closing date). The billing cycle doesn’t necessarily go from the first day to the last day of each month.
  • Keep in mind that the statement balance remains the same until the credit card issuer sends the next monthly statement. However, the statement balance and outstanding balance may or may not match. It depends on whether there’s been any activity on your card since the statement balance was last computed.

Why you should keep track of your balance

Staying on top of your credit card balance is crucial to maintaining a solid financial standing and preventing debt accumulation. It’s important to review your statements on a regular basis so that you can identify any unnecessary expenses that are driving up your bill to try and stay within budget. If you find yourself buying too many miscellaneous items on Amazon, for example, seeing them all lined up on your statement will give you good incentive to stop.

Reviewing your statement also lets you spot any fraudulent charges. That way you can contact your issuer and quickly dispute the charges before you accidentally pay for them.

Additionally, checking your balance can help you recognize any statement credits, such as if you’re expecting a refund, and annual fees that may have been applied to your balance.

How much of your outstanding balance should you pay?

You’re staring at your credit card bill and wondering how much of your balance to pay. The decision depends on your financial situation at the time. Here are three ways to pay and not risk damage to your credit.

Make at least the minimum payment

The statement balance often exceeds the minimum amount due that appears on a monthly statement. Let’s say the statement balance is $2,000, but the minimum payment due is $50. At the very least, you should make the minimum $50 payment by the due date. That way you at least won’t be charged any late fees or penalty APR.

Avoid paying interest

But if you want to avoid paying interest, you should pay the entire $2,000 statement balance. Paying the full statement balance is a smart way to escape interest charges. You don’t have to pay the entire outstanding balance to steer clear of interest and fees. Paying the statement balance from the lates will take care of that.

Reduce your credit utilization ratio

If you can, try to pay off your entire outstanding balance. That way you can reduce your credit utilization ratio, which accounts for 30 percent of your credit score. This ratio refers to the amount of money you owe on all of your credit cards divided by the total of the credit limits on your cards. Some experts recommend keeping your credit utilization ratio below 30 percent. Others suggest lower amounts, like 25 percent or even 10 percent. (Use our credit utilization calculator to see where you stand.)

How does your credit card balance affect your credit score?

Consistently making on-time credit card payments can improve your credit score. But even if you’re making on-time payments, carrying big credit card balances might hurt your credit score.

Your credit card balances can affect your credit score based on your credit utilization ratio — remember, that’s the overall amount you owe on your cards versus the overall credit limit. A high credit utilization ratio can drag down your credit score. If a credit card issuer sees that you carry high balances on your credit cards compared with your credit limits, it might view you as a risky customer.

Having a high balance may indicate that you’re having financial difficulties and are therefore paying your bills late or not at all. Keep in mind that your payment history accounts for 35 percent of your credit score. Making late payments or missing payments can harm that history and bring down your credit score.

Bottom line

High credit card balances can negatively impact your credit utilization ratio and your payment history. This could, in turn, make it more difficult for you to qualify for credit or, if you’re able to obtain new credit, subject you to higher interest rates. With this in mind, it is always a good rule of thumb to pay your balance in full at the end of each billing cycle to avoid these types of consequences.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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