TLDR
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Your credit card balance is the amount of credit that you’re using on your card.
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There are two types of credit card balances: Your statement balance, which reflects the balance at the time of your last statement, and your current balance, which updates throughout your billing cycle.
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Transferring your balance to a lower-interest credit account may help you pay off your debt, and can have a positive impact on your credit score.
A credit card is a convenient way to finance life’s purchases—but it comes with a warning tag. To use credit responsibly, keep an eye on your credit card balance so you don’t accidentally overspend.
Keeping track of the amount of money you owe on your card will reveal if you’re at risk of using more credit than you can comfortably pay off. It may also help you maintain good credit, since keeping a low balance—relative to your total available credit—factors into your score.
In this piece, we’ll share what you need to know about your credit card balance, with tips on how to ensure you’re managing your credit responsibly.
What does current balance mean?
Current balance is the balance outstanding on your credit card—the total amount you owe on your card today. You can check your current balance at any time using online or mobile banking.
This balance may or may not include pending transactions that have yet to be posted. Depending on your card issuer, pending purchases may take a few days to show up in your online or mobile account.
What is a statement balance?
Your statement balance is the balance on your credit card at the time your statement is issued. The date on this balance is indicated on your credit card statement, and will remain the same until your next statement is issued the following statement cycle.
Do I pay interest on my current balance or statement balance?
If you pay your statement balance in full before the payment due date each month, you won’t pay interest on those purchases. You pay interest on any portion of the balance that you don’t pay by the payment due date. You also pay interest on your current balance when you carry a balance month to month.
What is the difference between current balance and statement balance?
The key difference is timing: Your statement balance remains consistent until there is a new statement issued for the next billing cycle, while your current balance is updated throughout the billing cycle. So if you’re in the middle of your billing cycle, and you use your credit card or make a payment this cycle, your current balance will differ from the statement balance.
As a result, making a payment—or a purchase—won’t impact your statement balance until the next billing cycle, although you’ll see a change in your current balance within a few days.
What does a negative balance on a credit card mean?
Having a negative balance on your credit card means you’ve paid off more than the balance on your card. It’s a credit on your account. For example, if your balance is -$100, you can make $100 worth of purchases on the card without needing to make additional payments, because that will have brought your balance back to $0.
How much balance should I pay off and when?
The amount of your balance you pay down depends on your financial goals. It’s generally a good idea to pay off the balance entirely each billing cycle to avoid interest charges and minimize your total debt levels.
Most cards require a minimum monthly payment tied to the total amount owed. If you can’t pay off the balance each month, make at least the minimum payment on time, every time. Keep in mind that paying the minimum can stretch out payments for years. Aim to pay more than the minimum when you can.
Paying off your balance as soon as possible comes with several advantages:
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The more aggressively you pay down your card, the less total interest you’ll pay. If you pay off your balance in full each billing cycle, then your purchases will not accrue interest.
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Regularly paying the entire balance indicates that you’re spending within your means, which is a sign of strong financial management.
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Paying off your balance helps reduce your credit utilization ratio, which can help increase your credit score.
Learn more: Reduce Interest Costs on Your Credit Card
How do you transfer a credit card balance?
You can transfer the balance of one credit card to another—ideally, one with a lower interest rate than your current card or when you want to replace an existing credit card. Look for 0% or low-interest balance transfer offers. A one-time fee of a small percentage of the transferred amount is typically charged. You can also transfer the balance to another type of financing, such as a loan or line of credit.
Pro Tip: Why do a balance transfer?
If you’re carrying high-interest credit card debt, transferring the balance to a lower- or no-interest card can save money on interest—meaning you’ll pay off your debt sooner.
Learn more: What is a balance transfer credit card
If you’re transferring the balance to another card, you can usually request a transfer online, by phone or in a branch. If you’re using a loan or line of credit, you can move the money into your checking account and make a payment at a branch, online or via mobile banking, the same way you’d pay your regular monthly payment.
Does transferring your credit card balance affect your credit score?
It may. Opening a new credit account can slightly decrease your score in the short term. But there are potential long-term advantages: A balance transfer can help you pay down your debt, which can significantly increase your credit score.
Pro Tip: The best way to boost your credit score is to practice responsible credit management year-round.
If you’re carrying high-interest credit card debt, transferring the balance to a lower- or no-interest card can save money on interest—meaning you’ll pay off your debt sooner.
Learn more: Improving your credit score
The bottom line
Credit management is an important part of your financial well-being. Understanding your balance—and keeping tabs on how much you owe—is an essential part of managing your credit responsibly.
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