In this article, we’re explaining the current outstanding meaning in credit card and debt balances, and how to approach it.
This article is part of our free series on US banking and credit basics, ranging from how to get a credit card with an ITIN number to answering questions about how credit cards work.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Current Outstanding Meaning in Credit Card
- Paying Your Credit Card Statement Balance
- Frequently Asked Questions
- Ready to Open Accounts With Banks in the USA?
Current Outstanding [Meaning in Credit Card Debt]
The meaning of “current outstanding” in credit card debt is the total amount of credit that an individual has accumulated at any given time. In other words, it is the amount owed from the previous billing cycle plus the new amount of credit used during the current billing cycle. In short, current outstanding means the total amount of credit that a credit card holder has used.
Alternatively, if you’re looking to compare card options, it’s important to understand the difference between a credit card and a debit card to decide which type of card is best suited to your banking objectives. Both types of cards do have different levels of security measures and credit cards can have pins just like a debit card.
Before diving in any further, if this is your first time visiting GlobalBanks, don’t forget to download your FREE US Banking Starter Guide. It’s designed to help non-residents with opening bank accounts at top financial institutions in the US.
Does a Current Outstanding Affect Your Credit Score?
Current outstanding debt may affect your credit score if the amount of debt that you currently owe is high. This is because the current outstanding balance that you have on all credit products combined to provide a “credit utilization score”, which refers to how much debt you use compared to the amount of debt that is available to you. For context, as of 2023, the overall consumer debt in the United States totals totals $4.85 trillion.
In most cases, credit experts suggest maintaining a credit utilization score of less than 30%. Additionally, never missing payments, not checking your credit score often, and avoiding other hard pulls unless they are necessary, are generally considered other ways to maintain a good credit score.
Paying Your Credit Card Statement Balance
Paying your credit card statement balance is the normal approach that most people take to manage their credit cards. In fact, many people choose to pay the minimum payment amount, which is less than the current credit card statement.
However, it’s important to note that paying the minimum payment due results in interest being applied to the remaining statement balance, while paying the statement balance ensures that no interest is added to your debt.
Current Balance vs Outstanding Balance
Current balance and outstanding balance actually refer to the same thing, which is the total amount of debt that is owed on a credit card or other credit product. On the other hand, statement balance refers to the amount owed during a specific period of time, which is based on the billing from the previous billing cycle.
Frequently Asked Questions
Below are four of the most common questions we receive from people looking into what the meaning of the current outstanding balance in credit cards is. If you have further questions you would like to ask our team, don’t hesitate to get in touch.
Is It Ok to Pay the Current Outstanding on a Credit Card?
Yes, it is okay to pay the current outstanding balance on a credit card. That said, the current outstanding balance refers to the total amount owed for both the previous and the current billing cycles. With this in mind, most credit card holders typically elect to pay the statement balance (previous period) and wait to pay the current period when they receive the next credit card statement.
Should I Pay the Outstanding or Current Balance?
Whether you should pay the outstanding or current balance depends on your priorities. In most cases, cardholders will only want to pay the outstanding balance, which is the amount they owe during the current billing cycle. Doing so will ensure that they do not incur any interest on the charges. That said, if an individual is looking to reduce their overall credit utilization score, they may elect to pay their entire current balance.
What Does Current Outstanding Balance Mean?
Current outstanding balance means the amount that a credit card holder owes at any given time on their credit card. In other words, this is the amount of credit that has been used and debt that has accumulated by making purchases with the card.
How Do I Clear My Current Outstanding Balance on My Credit Card?
To clear your current outstanding balance on your credit card, you will first need to confirm the amount outstanding that you owe. This refers to the total balance that you owe on your card. Next, you will need to arrange payment either through an online transfer or (if possible) by visiting a branch of your bank and paying in person.
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