What Is Available Balance on a Credit Card?
Understand your credit card's available balance, how it changes with your spending and payments, and simple ways to access this crucial information.
Understanding your credit card’s available balance is a key aspect of financial management. This concept represents the amount of credit you can still use for purchases or cash advances at any given moment. Knowing how this figure is determined and fluctuates helps prevent overspending and fees.
Defining Your Available Credit
Available balance is the portion of your credit limit that remains accessible for immediate use. It is the total credit extended to you by the issuer, minus any outstanding balance and pending transactions. The calculation involves subtracting your current balance and any authorized but unposted transactions from your credit limit.
Your credit limit represents the maximum amount of money you are permitted to borrow on that specific card. The current balance includes all transactions that have already been processed and added to your account, reflecting what you currently owe. Pending transactions are recent purchases or debits that have been authorized by the merchant but have not yet fully cleared and appeared on your statement. Authorization holds, common with gas stations or hotels, temporarily reduce your available balance for an estimated amount, reserving funds for the eventual charge.
Understanding How Your Available Credit Changes
Your available balance constantly adjusts based on account activity. When you make a purchase, your available balance typically decreases almost immediately by the transaction amount once authorized. This reduction occurs even before the transaction fully posts to your account, ensuring you do not exceed your credit limit.
Conversely, making a payment increases your available balance. The speed of this increase depends on the payment method and the card issuer’s processing times; electronic payments may take one to three business days, while mailed checks could take longer. Similarly, a refund for a returned item increases your available balance once processed by the merchant and your card issuer, which can take several business days.
Authorization holds, common for car rentals or hotel bookings, temporarily reduce your available balance. For example, a gas station might place a hold for a set amount, such as $75 or $100, even if you only pump $50 worth of fuel. This hold ensures funds are available for the purchase and typically drops off within a few days once the transaction is finalized or canceled.
Ways to Check Your Available Credit
You can check your credit card’s available balance through several methods provided by your card issuer. One common way is logging into your online banking portal. After logging in, navigate to your credit card account details, where the available balance is displayed alongside your credit limit and current balance.
Mobile banking applications offer another way to view this information. Most credit card apps provide an overview of your account, including available balance, often on the main dashboard or within the account summary. You can also find your available balance listed on your monthly credit card statements, usually near the top or within the summary section.
Calling the customer service number on the back of your credit card allows you to speak with a representative who can provide your available balance. Some credit card issuers also enable you to check your available balance at an ATM, though this varies by issuer and ATM network.