Take Control of Credit Card Debt: Current Balance vs. Available Credit

When you log in to your credit card account, you’ll see your current balance and available credit. If you don’t understand what these numbers mean, you may get confused about what you’ve spent on your credit card — and what you still have available to spend. 

It’s helpful to keep tabs on both your current balance and available credit so you don’t spend too much, whether that’s beyond your budget, your credit line, or both.

The available credit on your credit card is the amount of your credit limit that you haven’t used yet. It’s the difference between your current balance plus any pending charges and your credit limit. And it’s also the amount you can still charge to your card before exceeding your credit limit.

While your available credit is there for you to use, don’t consider it a blank check since you’ll have to pay it back either by your payment due date or with interest at a later date.

Let’s get the details on your credit card’s current balance and available credit and what these numbers mean for managing credit card balances and debt.

Available Credit

Your credit card’s available credit is the amount of credit remaining that you can use for new purchases, cash advances, or balance transfers. It’s generally displayed prominently on your credit card statement or online account, often right next to your current balance or statement balance.

Available credit is part of your credit limit, but unless you have a zero balance — no charges on your credit card account — it’s less than your credit limit. You can calculate your available credit by taking your credit limit and subtracting your current balance and any pending charges.

In the above example, let’s say you have a credit card with a $22,200 limit. If you make $263 in charges, you’ll be left with $21,936 in available credit. That means you could charge up to $21,936 more before you max out your credit limit. If you have another $500 in pending charges that haven’t cleared yet, your available credit would be $21,436.

Can You Have a Negative Available Credit?

Negative available credit is the amount by which you’ve exceeded your credit limit. That can happen if a credit card allows you to spend past your credit limit or you’ve maxed out your credit limit and the credit card company charged fees or interest on top of it. Usually, the minimum payment on your statement balance will include any amount you’ve exceeded your credit limit.

That’s different than a negative credit card balance, which means the credit card company owes you money, usually due to an overpayment or a refund from a merchant. You can spend a negative credit card balance by using your credit card, or you can ask for a cash payment.

Expanding Your Available Credit

Your available credit might not always be enough for your spending needs. You can issuers such as American Express or Chase for a higher credit limit or make payments to reduce your current balance and increase your available credit. 

Let’s say you need to spend $3,000 in a statement period on a credit card with a $2,000 limit. You can ask for a higher credit limit of $3,000 or more. If that’s not possible, you could make a $1,000 payment to increase your available credit. 

Here’s what that $1,000 payment scenario looks like: You’d spend up to your $2,000 limit, leaving you with $0 available credit. If you make a $1,000 payment, you’d have $1,000 in available credit to use again, so you could make another $1,000 charge within the same statement period. 

But just because you can theoretically use all of your available credit — and then some — doesn’t mean you should.

Should You Use Your Available Credit?

It’s rarely a good idea to use all your available credit unless you have the funds ready to pay back the full statement balance by your due date.

It’s smart to stay on top of your available credit and know how much credit you have available so you don’t exceed your credit limit. 

It’s even better to avoid using much of your credit limit. The general rule is to use no more than 30% of your card’s credit limit in a statement period to avoid negative impacts on your credit score.

Pending Transactions Affect Your Available Balance

Pending transactions are transactions that a merchant has authorized but have not yet posted to your credit card account. These transactions are still in process and do not count toward your current balance or statement balance, but they do affect your available credit. 

Until a pending transaction is finalized and posted — or cleared from your account — your available credit is reduced by the transaction amount.

Usually, pending transactions stay on your credit card for a few days or up to a week while the charge is verified, finalized, and posted to or removed from your account.

Pending charges can include temporary holds, such as a hold placed by a hotel at check-in for incidentals. For example, a hotel may place a $75 hold, which you’ll see as a pending charge on your credit card account. If you don’t make any charges to the room, that pending charge will clear a few days to a week after you check out. While the charge is still pending, your credit card’s available credit is reduced by $75, but the $75 becomes available again once the pending charge clears.

If you’re concerned about a pending transaction on your credit card that’s persisted for a week or more, contact the merchant and your credit card issuer to find out what’s holding up the transaction.

Current Balance

Your credit card’s current balance is the total amount you’ve charged to your credit card, but haven’t paid yet. That can include purchases, cash advances, balance transfers, fees, and accrued interest, but generally does not include pending charges. Your current balance can be reduced with payments.

The current balance you see on your online account is not the same amount as your statement balance — unless you’re looking at it on your statement closing date. The statement balance is the total amount you owe at the end of a billing cycle. Your current balance is generally higher because your current balance includes your statement balance plus any additional charges made after your statement period closes.

If you pay off your current balance at any time, your balance will drop to zero, and you’ll have your entire credit line as your available credit. 

Managing Credit Card Balances and Debt

Staying on top of your current balance, along with your available credit, can help you manage your credit card spending. The most important number to track is your current balance because it’s what you’ve already spent and will have to pay back. 

But your available balance matters, too, because it’s the most you can spend on your credit card before you hit your credit limit. If you hit your credit limit, you typically can’t make new charges until you make a payment to increase your available credit.

Your current balance is what you owe on your credit card. Eventually, you’ll have to pay it. If you pay your full statement balance by the due date, you can avoid interest charges, which is ideal.

You should make at least the minimum payment by the due date on your credit card statement so you can avoid late fees and other penalties. It will also increase your available credit. However, you’ll pay interest unless you have a 0% promotional rate.

Carrying a balance — and accruing interest — from month to month can contribute to credit card debt, making your current balance run higher as you add interest charges and new purchases. 

While your available credit is there for you to spend if you need it, we don’t recommend using all your available credit. When you do that, you put yourself at risk of overspending and not being able to pay your credit card bills, which can bury you in interest charges, fees, and credit card debt that’s tough to shake.

It’s best to think of your credit card’s available credit not as an amount you can spend, but as a cushion. Rather than spending all of your card’s available credit limit, spend just what you can afford to pay off by your statement due date. That way, you can avoid interest charges and carrying debt from month to month.

Final Thoughts

If you have a credit card, you should understand the difference between your current balance and available credit to manage your credit card effectively.

Your current balance is what you’ve spent and have to pay back, while your available credit is what you could potentially spend before you reach your credit limit. Ideally, you’ll keep your current balance low and available credit high. Keep an eye on both numbers to make informed decisions about your spending, avoid credit card debt, and maintain a healthy credit score.