Outstanding amount, meaning the total balance owed, is a common term in banking, credit cards, and invoicing.
In this article, we will be exploring the meaning of outstanding amount in terms of credit cards. This will include answering common questions we receive and sharing the exact meaning of the outstanding amount below.
This article is part of our series on bank account opening in different countries, which you can access for free following the link above.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Outstanding amount meaning
- Where to Find Your Outstanding Balance for Your Credit Card
- Frequently Asked Questions
- Do You Want Help Opening Bank Accounts?
Outstanding Amount Meaning
Outstanding amount, meaning the total remaining balance an individual or company owes to a lender, service provider, or other entity that has provided goods or services to them.
Depending on the specific terms of the arrangement, an outstanding amount may be due on receipt of invoice, in a specified period of time, or incrementally – meaning interest applies each month.
With this in mind, it’s important to understand the specific terms and meaning of an outstanding amount, to ensure that additional costs are not incurred unintentionally.
Where to Find Your Outstanding Balance for Your Credit Card
You can find your outstanding balance in 5 places, including physical credit card statements, online credit card statements, online banking, mobile banking application, or by contacting your card issuer directly and requesting the information.
Of course, depending on the specific preferences in your account, you may only receive electronic copies of your account statements. In this case, you may also receive an email telling you how much needs to be paid at the end of each month.
When Do I Need to Pay My Outstanding Balance?
When you need to pay your outstanding balance depends on the specific terms of your credit card. However, in most cases, credit card providers only require card holders to pay the minimum required payment before the end of each payment cycle. The minimum payment is not the outstanding balance.
In fact, many credit card providers prefer that card holders only pay the minimum balance as this ensures the total balance increases as consumers continue to use their cards. As total balance increases, so does the total interest paid on the total outstanding balance each month, resulting in higher profits for credit card holders.
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Frequently Asked Questions
Below are a few of the most common questions we receive from people looking into the meaning of outstanding amount. If you have further questions you would like to ask our team, don’t hesitate to get in touch.
What Is an Example of Outstanding Amount?
An example of outstanding amount is the current balance on a credit card, which is the total amount that an individual card holder owes at any given time. That said, credit cards do not expect customers to pay the entire outstanding amount immediately, meaning they prefer payments over a longer period of time. This ensures consumers incur interest, which results in greater profit for the credit card company and higher payments for the card holder.
The one exception to the preference for longer repayment periods is a charge card, like many American Express cards. Charge cards need to be paid at the end of each month, resulting in no interest being applied to the outstanding balance.
Do I Need to Pay an Outstanding Balance?
Yes, you do need to pay an outstanding balance eventually. Depending on the circumstances and terms of agreement, this may involve immediate payment, payment within a specified period of time, or incremental payments. In most cases, when incremental payments are made, an annualized interest rate applies to the balance at the end of each month, increasing the overall amount paid.
What Is Payment for Outstanding Amount?
Payment for outstanding amounts may refer to one of three things, either the minimum required payment on an outstanding balance of debt, or the total outstanding balance that needs to be paid on a debt, or the outstanding amount that needs to be paid on an invoice.
In all three instances, lenders and service providers typically state the amount owed, the payment terms available, and the interest that will be applied along with the frequency when payments are not made.
Is Outstanding the Same as Balance?
Yes, the outstanding amount is the same as balance when looking at credit cards, personal loans, and other debt products. Outstanding balance is also known as the current balance. In short, this is the amount that an individual or corporate borrower owes to a lender at any given time.
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