Understanding Credit Card Statements: Rs 64,000 as Total Due vs. Rs 120,000 as Outstanding Balance

When your credit card statement shows a total due of Rs 64,000 and an outstanding balance of Rs 120,000, it is important to understand the implications and what actions you need to take to manage your credit card debt effectively.

What Does the Total Due and Outstanding Balance Mean?

When you receive your credit card statement, it typically shows two key figures: the total due and the outstanding balance.

Total Due (Rs 64,000)

The Total Due on your credit card statement is the minimum amount that you need to pay to avoid late fees and additional interest charges. This amount is based on your recent transactions and includes the following:

The minimum payment required Recent purchases Fees and interest accrued for the billing period

Paying the total due ensures that you stay within your credit agreement and maintain a good repayment history.

Outstanding Balance (Rs 120,000)

The outstanding balance is the total amount you owe on your credit card, including all transactions, fees, and any unpaid balance from previous months. This figure reflects the cumulative spending on the card, including purchases that have not yet been paid. In your case:

Last statement balance (Rs 64,000): This is the final balance from your last billing cycle, ending on July 8th. Current and future spending (Rs 120,000 - Rs 64,000 Rs 56,000): This figure includes spending from July 9th until the end of the current billing cycle on August 8th. Any new spending during this period will be added to the outstanding balance.

Explanation of Your Specific Case

Your last statement balance (Rs 64,000) is fixed and represents the amount you spent up to the end of the last billing cycle, which is July 8th. The current outstanding balance (Rs 120,000) is the result of:

Your last statement balance (Rs 64,000) New spending that occurred from July 9th until the current billing cycle ends on August 8th (Rs 56,000)

It is important to note that:

You are responsible for paying the last statement balance or the minimum amount due (MAD) to avoid late payment fees and maintain a good repayment history. The minimum amount due (MAD) is usually 5% of the total amount due.

Managing Your Credit Card Debt

Pay More Than the Total Due: To effectively manage your debt, consider paying more than the total due. This reduces the outstanding balance and minimizes interest charges. Understand Billing Cycles: Your billing cycle is the period during which your transactions are monitored. You are expected to pay by the due date, usually within 30 days of the cutoff date. Monitor Unbilled Transactions: Transactions that occur between the last billing cycle and the due date are shown as unbilled transactions in your credit card account. These transactions become part of your next statement.

Further Reading

To gain a more comprehensive understanding of credit card statements, you can read the following resources:

Understanding Your Credit Card Statement: Learn about different components of your credit card statement. How to Read Your Credit Card Bills: Get tips on interpreting your credit card bills and managing your finances.

By understanding the total due and outstanding balance on your credit card statement, you can take proactive steps to manage your finances and avoid late fees and additional interest charges.