What Is An Available Balance?
When you are working on your finances there are a number of terms you will see everywhere. One of these terms is ‘available balance.’
What is an available balance and what does it refer to? Is it only applicable to certain types of accounts? What can affect your available balance?
What Is An Available Balance?
An available balance is the money you have available in your account to spend right now. The term is generally used to refer to checking or debit accounts and is constantly changing as you go through the day and make purchases.
If you login to your online banking right now the prominent number you will see is your available balance. This is the amount of money you can use at this moment with pending transactions factored in. This is the amount of money left in your account.
One thing that will not necessarily show up as ‘processing’ until a few days later is any check you have written. Because they don’t have to be cashed immediately, checks will only be deducted from your available balance once they have been submitted to be deposited or cashed. Otherwise any electronic payment or transaction will generally be reflected in your available balance promptly.
What Is Available Credit?
Available balance is a term that generally refers to checking accounts or accounts in which you have deposited money to make up the balance. When you are looking at your credit card statement the applicable term will be available credit.
Available credit is the same kind of concept as available balance except this number shows you how much credit you have available until you hit your limit. You do not have this money, you only have this amount of credit available to use.
A balance on a credit card is not the money you have available to you, it refers to the amount of money you owe on your account. You may have a limit of $20,000 with a balance of $5,000 and an available credit of $15,000. Your balance and your available credit added together will always equal your credit limit.
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