What is Outstanding Amount in Credit Card?
Let’s clear the air on a term that pops up every month on your credit card statement, ‘outstanding amount’. Ever wondered what is outstanding amount in credit card?
Well, in simple terms, the outstanding balance in credit card is nothing but the total amount you currently owe your credit card issuer. This balance is inclusive of all your purchases, cash advances, interest charges and late fee in case you have delayed your payment.
You’ll be better able to understand outstanding balance in credit card with an example:
Suppose you spent ₹20,000 last month and didn’t pay it off. That ₹20,000 becomes your outstanding amount. If you spend ₹5,000 more this month and fail to make a payment, your new outstanding balance will be ₹25,000 (plus interest, of course).
See, managing your outstanding amount is important if you want to maintain a good financial health or else, you’ll end up paying a lot more than you should have initially. Besides, a high outstanding balance affects your credit score, which can impact your ability to get loans in the future.