{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.indusind.com\/iblogs\/categories\/manage-your-finance\/understanding-outstanding-amounts-on-credit-cards\/#BlogPosting","mainEntityOfPage":"https:\/\/www.indusind.com\/iblogs\/categories\/manage-your-finance\/understanding-outstanding-amounts-on-credit-cards\/","headline":"Outstanding Amount in a Credit Card: Know Meaning and Importance","name":"Outstanding Amount in a Credit Card: Know Meaning and Importance","description":"If you use a credit card or plan to apply for one, you must know all there is to know about the outstanding amount. This number affects your credit score and financial health.  The outstanding amount on your credit card refers to the total unpaid balance on your card. Let\u2019s understand the meaning of the...","datePublished":"2024-06-28","dateModified":"2024-06-28","author":{"@type":"Person","@id":"https:\/\/www.indusind.com\/iblogs\/author\/indusind\/#Person","name":"IndusInd Bank","url":"https:\/\/www.indusind.com\/iblogs\/author\/indusind\/","image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/8169561f34fb61e737060f1a537a86e2?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/8169561f34fb61e737060f1a537a86e2?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"IndusInd","logo":{"@type":"ImageObject","@id":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/logo-2.png","url":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/logo-2.png","width":201,"height":86}},"image":{"@type":"ImageObject","@id":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/outstanding-amount-in-credit-card-know-meaning.jpg","url":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/outstanding-amount-in-credit-card-know-meaning.jpg","height":288,"width":764},"url":"https:\/\/www.indusind.com\/iblogs\/categories\/manage-your-finance\/understanding-outstanding-amounts-on-credit-cards\/","about":["Manage your Finance"],"wordCount":1149,"articleBody":"If you use a credit card or plan to apply for one, you must know all there is to know about the outstanding amount. This number affects your credit score and financial health. The outstanding amount on your credit card refers to the total unpaid balance on your card.Let\u2019s understand the meaning of the outstanding amount on credit cards in detail:Understanding Outstanding Amounts on Credit CardsThe following points provide an overview of the outstanding amount on credit cards:The outstanding amount on your credit card is the total balance you owe to the credit card issuer at any given moment. It includes all purchases, interest charges, fees, and any unpaid balance from previous billing cycles. When you use a credit card for purchases, cash advances, or balance transfers, these amounts add to your outstanding balance. The amount fluctuates based on purchases or payments. Keep track of your outstanding amount to stay within your credit limit. You may incur over-limit fees and negative impacts on your credit score if you cross the credit limit. Some people may wonder whether the outstanding balance is the same as the statement balance on their credit card. These are two separate figures in your credit card statement.The statement balance is the amount you need to pay by the due date to avoid interest charges. On the other hand, the outstanding amount is the total debt as of a particular date.Now that you understand what the outstanding amount on a credit card is, let\u2019s also understand its importance for more clarity.Why You Should Clear Your Outstanding Balance at the EarliestClear your outstanding balance as soon as possible so that:1. You Can Avoid High Interest ChargesBanks charge high interest rates on outstanding balances if not paid by due date. You can avoid these charges and save money in the long run by paying off your balance in full by due date.2. You can Improve Your Credit ScoreA low outstanding amount on your credit card can help maintain a lower credit utilisation ratio. This ratio refers to the amount of credit utilised compared to the total available credit. A low credit utilisation ratio has positive effects on your credit score. A strong credit score can help you secure future loans and credit at affordable terms.3. You Avoid Penalties and FeesIn addition to high interest rates, you may incur late fees and penalties if you do not clear your outstanding amount. It can increase your debt burden in the long run. 4. It Helps You Maintain Financial DisciplineClearing your outstanding balance on time encourages a sense of good financial habits and discipline. It ensures you live within your means and use credit responsibly. 5. You Get Peace of MindWhen you pay off the total outstanding amount on your credit card, you can let go of the stress and anxiety associated with debt. It can help you focus on other financial goals, such as saving and investing.Also Read: Essential Credit Card Terminology- Key Terms and Definitions ExplainedConclusionUnderstanding the meaning of the outstanding amount on a credit card and its significance can help you deal with credit responsibly. Clearing the outstanding amount is easier when there are fewer costs involved. Hence, consider opting for a lifetime free credit card with IndusInd Bank. These cards have zero joining or annual fees, which reduces the overall costs associated with credit cards. Also, you enjoy various perks, such as reward points that never expire, complimentary movie tickets, airport lounge access, and more! Take control of your finances today with IndusInd Bank’s range of credit cards. Apply now!\u00a0Disclaimer:The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct\/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.Share This:"}