Credit Card Balance – Everything You Need to Know

Credit Card Balance – Everything You Need to Know
  • Opening Intro -

    Credit cards have become very common in America today.

    This trend is a clear indication of the direction in which finances are moving.


With a rise in the cost of living it should not surprise you to learn that almost half of Americans today have a credit card balance.

These findings bring us to today’s question. What is a credit card balance? In this article we will look at how credit card balance is calculated, to help us make an informed financial decision next time we use a credit card.

Credit card balance refers to the monetary value of your credit card. This balance in simpler terms is the amount of money that you as the credit card holder have in your account. A credit card balance can be zero, positive or negative. A zero balance comes in when you fully settle your debt.

The balance is typically negative when you have more credit balance than your current credit spending. A positive credit card balance, on the other hand, is reflected when you have unpaid balances.

The calculation of credit card balance

According to my research, finding the things that go into credit card balance calculation include: balances that are yet to be settled, credit purchases, interests charged and other expenses that are incurred while the goods are in transit.

Another factor that affects your credit card’s balance is the grace period. The grace period is the time you are given to pay your balance once you receive the balance statement without being charged any interest. However, the grace period only applies if you entirely settle the account balance on the agreed date. If you can only pay the minimum balance, the grace period policy becomes null and void.

When you pay the minimum amount due, the remaining balance is charged interest. This interest charged varies depending on the rates agreed upon between the credit card holder and the issuing company. You can find these details in the cardholder’s agreement signed during issuing of the credit card. Alternatively, if you don’t have the agreement, you can get the information from the customer care center.

Understanding statement credits

Another area that we need to look at critically is statement credits. Statement credits is an area in which most people today have little or no idea whatsoever regarding how it works. Statement credits refers to the money surplus in your account, also known as a negative balance.

A credit balance can be acquired from several sources. For instance, if you returned an item that had been bought on credit. Other instances that are treated as credits include; credit card rewards, personal payments to your credit card and adding rewards that you had earned previously to your account.

Learning what a credit card balance is and how this balance is calculated, will help to follow up the charges credited in your account and quickly spot errors if any. It will also help you make better, well informed, financial decisions regarding your spending.

Consumer Tips reference:

reducing credit card debt

Bestseller No. 1

Last update on 2020-03-19 / Affiliate links / Images from Amazon Product Advertising API


end of post idea for home improvement


Helpful article? Leave us a quick comment below.
And please give this article a rating and/or share it within your social networks.

facebook linkedin pinterest

Amazon Affiliate Disclosure: is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to The commission earnings are used to defray our cost of operation.

View our FTC Disclosure for other affiliate information.

About Author