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What is a credit card balance?

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Tom Werner / DigitalVision / Getty Images
Mother explaining financial topic to young boy sitting at laptop
Tom Werner / DigitalVision / Getty Images
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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.

Written by
Sarah Brodsky
Personal Finance Expert Contributor
Sarah Brodsky is a freelance writer specializing in personal finance and economics. She has more than 12 years of experience writing about credit, consumer banking and investing. Sarah writes for Credit Karma and Impactivate, and her clients have included Glassdoor and the Institute for Humane Studies. Her articles have been published by Haven Life, KeyBank, Investopedia, First Citizens Bank of Raleigh, North Carolina and the Coosa Valley Credit Union.
Edited by
Associate Editor