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Which Credit Card Balance You Need to Pay

There are a lot of different terms you will need to learn when you become a credit card holder. Our Glossary comprises of all of the terms you should know. Credit card activity primarily consists of using credit and repaying your balance. There are multiple balances as you may have already seen, and the difference between these balances are simple once you are a little more familiar with them.

Minimum Balance

The minimum balance is the lowest payment amount you need to make in order to avoid penalties such as a late payment fee, an increased interest rate, or a strike on your credit score. Keep in mind that the longer your outstanding balance stays around, the harder it will ultimately be to pay it off as any remaining balance will increase from interest charges every month.

Current Balance

Your current balance on a credit card is the balance that you have accrued up to date. The current balance includes any charges made on your account during the month plus your previous balance. If any portion of your current balance remains after your billing period, you will incur interest. Many people who want to prioritize paying off their credit card will pay their current balance in full to avoid interest from accumulating.

Outstanding Balance

The outstanding balance is your current balance plus any additional charges. Your outstanding balance will subsequently be the largest balance to pay off on your credit card. When it comes to your credit limit, you never want your outstanding balance to exceed it. Using too much of your credit (generally greater than 40% of your credit limit) can lead to negative marks on your credit score.


For credit card balance payments, you always want to make at least a minimum balance payment for you credit card. Ideally, you will want to make a payment larger than a minimum balance payment to avoid accruing too much interest and build a good credit history overtime.

In the next lesson, learn more about How Much You Should Pay Every Month for Your Credit Card.


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