How to know the balance on my credit card
How to know the balance on my credit card

How to know the balance on my credit card?

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Know the balance on your credit card: We recommend learning to understand the balance of your credit card. Here is the information regarding How to know the balance on my credit card? This is the amount of money that you owe to the bank or financial institution that issued it, a figure that varies based on your expenditures and payment frequency. Essentially, the balance on a credit card is the total amount of money you owe at any given time, and this “debt” is reflected in the account. Your balance changes when you make a purchase: When you make a purchase, your balance increases. If you make a payment, your balance decreases.

Purchases, however, are not the only factor affecting the balance. Cash advances, balance transfers, interest charges, as well as fees (annual fees or late fees, for example) incurred during the billing cycle can increase the total amount of your debt.

The remaining balance of your account is carried over to the next billing cycle if you do not pay your account on time and in full each month. The amount of the balance you have not paid is subject to interest charges.

You can find out what impact carrying a balance on a credit card can have on your financial health by reading on.

How does carrying a balance on a credit card work?

If you fail to pay your credit card bill on time and in full each month, the remainder (the unpaid balance) will roll over to the next month. There is a good chance that you will be charged interest if you have a balance.

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What balance is considered a good one?

Carrying a balance on your credit card is not a good idea in general. Nevertheless, life happens, and sometimes we cannot pay all our bills on time, isn’t it? Pay attention to how much you are spending in relation to your credit limit if you find yourself in this situation.

You can reduce the impact on your credit score if you reach or approach your credit limit by using one of the following strategies. You need to lower your credit utilization ratio.

  • Ask your card company for a credit limit increase (remember that this may result in a hard inquiry into your credit);
  • Don’t wait to pay a lump sum on your credit card account. Make more than one payment each month. You’ll reduce the balance if you make more than one payment each month.

How do a minimum payment, a statement, and a balance differ?

Despite the fact that the balance on your credit card represents the total amount you owe, you may see other numbers on your statement, such as:

  • Minimum Payment:  To avoid being charged late fees, you must pay the minimum amount to your credit card company before the due date.
  • Account status: It contains all the charges that appear on your credit card at the end of the billing cycle, any balance you carry, and accumulated interest. It does not include purchases, cash advances, or balance transfers added to your account after the billing cycle has ended.

For the most up-to-date information about your account, log into your account online or call the company that issued your card.

Keep reading: How to improve your credit score and what is it?

Why should I keep track of my credit card balance?

By paying attention to your credit card balance, you can keep your finances in order and improve your credit rating. Find out why?

  • It helps you keep control of your spending. You can easily forget how much you’ve spent when you make purchases with a credit card. You can stay on budget by keeping track of your balance.
  • Keeping track can prevent interest charges. Keep your spending under control by controlling your purchases so you will not have difficulty paying your bill in full and on time, which, in turn, will prevent you from accruing interest.
  • You can also keep your credit utilization low. If you frequently exceed the credit limit on your credit cards or get too close to it, your credit utilization ratio , or how much of your available credit you’ve used, may be high. Keeping track of your spending can help you stay below your credit limit and have low utilization, both of which are beneficial to your credit.

The most common mistakes people make when they have a credit card balance

  • You can “advance” monthly instalments by paying more than necessary. If you make a purchase of $12,000 pesos at 6 months without interest, you would be mistaken if you believe the bank will apply that “extra” $4,000 to reduce your MSI expenses. If you would like to advance your bills, you will have to contact your bank and see if this is possible.
  • Save the surplus. Most people believe that the bank will not take that excess amount until the next payment date, and that it will remain there until then. Moreover, the bank could apply the credit balance to your next purchase with the card. There is no savings account associated with your credit card.
  • You should maintain a credit balance to “improve my credit history”. This will not generate a mark in your history; your good behaviour when buying something on credit and paying on time will. The fact that you have a balance in your favour will not matter.
  • Failure to prioritize payment. Although a person may have more debts, the card is one of the most expensive and it is advisable to pay it as soon as possible. Money that has never been used must be returned and paid when a debt is uncontrolled. This is not smart or recommended.
  •  Pay the minimum value. Unless you have an emergency and your budget is very tight, paying the minimum amount is the worst thing to do because the entire debt balance will grow month after month with a high interest rate.
  • Have a fan of cards. Having two separate franchise cards makes sense if you travel frequently, so you will be sure to receive one. However, having five cards because one gives you miles, another allows you to shop at a department store, another offers travel insurance, and so on, just becomes confusing and in the end makes you spend more than you should. It is important to remember that the budget is the same for each card and that to get more benefits, you must spend more.
  • You have a large balance. You should never owe more than 30 percent of the credit line because the balance also appears on your credit report. The more you owe, the less qualification you will receive and this will affect your ability to get a car or house loan. The more risk the bank perceives, the more interest it will charge.

Keep reading: How do I increase my credit score with Capital One?

Special Considerations

Pay down your credit card balance

In order to manage credit effectively, a credit card should have no balance. Negative balances also help avoid the high interest rates associated with positive balances.

In the case of having a balance, you should make the minimum payment plus an additional payment. You will not only be able to pay off the debt faster, but you will also have less interest to pay.

Unfortunately, this is not always the case. In some cases, you may be able to make only the minimum payment. As a result, paying off the balance of your credit card will take some time, but your credit score will remain intact.

Credit card balances and credit scores

The general rule is that carrying a credit card balance is not a good idea. But why? Because it affects your credit score. Your credit utilization, which accounts for 30% of your score, is affected by carrying such a balance. In this order of ideas, your utilization percentage should be 20% or less of the total credit available.

Let’s look at an example. If you carry a balance of $4,000 on a $5,000 credit limit, then your credit utilization is 80%, which is extremely high. You tell creditors and lenders that you are unreliable with your credit and are likely to default on a future loan or credit card. In the same way, a low credit utilization shows lenders and creditors that you are capable of handling credit responsibly.

As we have already explained, talk to your credit card company to increase the limit of the card, since this will reduce the utilization of your credit. Important: As we have already explained before, talk to your credit card company to increase the limit of the card, since this will decrease the utilization of your credit.


Credit cards can be a powerful tool for building or rebuilding credit, but be sure to use them wisely, advises Ash Exantus, director of financial education at BankMobile.

It’s always best to pay off a credit card balance as soon as possible because carrying a balance can negatively impact your credit score, and those interest payments can add up.

In order to avoid running up a balance on their credit cards, Exantus advises consumers not to use their credit cards for anything they can’t pay for in cash.

It is important to keep in mind that a credit card is an additional financial support and not a line of credit that you are taking out. By properly using and managing it, you will be able to increase your credit limit and avoid the risk of damaging your credit rating.