Average Outstanding Balance

AAA

DEFINITION of 'Average Outstanding Balance'

The unpaid, interest-bearing balance of a loan or loan portfolio averaged over a period of time, usually one month. The average outstanding balance refers to any term, instalment, revolving or credit card debt on which interest is charged.

INVESTOPEDIA EXPLAINS 'Average Outstanding Balance'

The average outstanding balance on credit cards and loans is a critical factor in a consumer's credit rating. Average outstanding balances on credit cards are reported to credit agencies monthly on active accounts, along with any amounts that are past due.

RELATED TERMS
  1. Credit Rating

    An assessment of the credit worthiness of a borrower in general ...
  2. Consumer Debt

    Debts that are owed as a result of purchasing goods that are ...
  3. Average Balance

    The balance on a loan or depositary account. A simple average ...
  4. Loan

    The act of giving money, property or other material goods to ...
  5. Average Daily Balance Method

    A credit card accounting method where interest charges are based ...
  6. Luhn Algorithm

    An algorithm used to validate a credit card number.
RELATED FAQS
  1. How is my credit score calculated?

    The credit score, commonly referred to as a FICO score, is a proprietary tool created by the Fair Isaac Corporation. This ... Read Full Answer >>
  2. What is the difference between "closed end credit" and a "line of credit?"

    Depending on the need, an individual or business may take out a form of credit that is either open- or closed-ended. While ... Read Full Answer >>
  3. What is the best way to start to rebuild your credit after a bankruptcy?

    Bankruptcies can be devastating to your credit score. Even worse, a bankruptcy will be listed on your credit report for between ... Read Full Answer >>
  4. What were the primary financial crimes involved in the ZZZZ Best case?

    ZZZZ Best was a company started by Barry Jay Minkow that claimed to be a carpet cleaning business. In fact, it was a Ponzi ... Read Full Answer >>
  5. Can a creditor sue me for a delinquent account?

    If a credit card account becomes delinquent, the creditor can sue the debtor for the balance as soon as the delinquency occurs. ... Read Full Answer >>
  6. How do I transfer my credit card history from one country to another?

    It is currently not possible to transfer your credit history to another country if you relocate. The credit metrics used ... Read Full Answer >>
Related Articles
  1. Credit & Loans

    The Importance Of Your Credit Rating

    A great starting point for learning what a credit score is, how it is calculated and why it is so important.
  2. Options & Futures

    6 Major Credit Card Mistakes

    Avoid these pitfalls to keep your credit score healthy and your debt under control.
  3. Credit & Loans

    Expert Tips For Cutting Credit Card Debt

    Managing your debt could mean the difference between spending $45,000 or saving $184,000.
  4. Credit & Loans

    American Express Cards: Centurion Vs. Platinum

    If you're offered a coveted black card from AmEx, should you accept it?
  5. Credit & Loans

    Credit Cards Offering The Most Airline Miles

    Besides one mile for every dollar spent on purchases, you can rack up thousands more – up to 50,000 – thanks to these cards' intro offers and bonus points.
  6. Economics

    What Does a Creditor Do?

    A creditor is a person or entity that loans money or provides goods or services to another entity with the expectation of being paid back in the future.
  7. Credit & Loans

    Review: Chase IHG Rewards Club Select Credit Card

    This rewards card gives you instant platinum elite status at more than 4,700 Intercontinental Hotel Group properties. Does that make it worth having?
  8. Budgeting

    What is Discretionary Income?

    Discretionary income is an economic term referring to income left over after a person pays taxes and living expenses.
  9. Credit & Loans

    Credit Card Review: Citi ThankYou Premier Credit Card

    This higher-end card provides a wide range of rewards types. The question is: Are they rich enough to be worth the annual fee after the first free year?
  10. Credit & Loans

    Credit Card Reviews: HHonors Reserve Credit Card

    The pros and cons of a famed hotelier's plastic.

You May Also Like

Hot Definitions
  1. Social Security

    A United States federal program of social insurance and benefits developed in 1935. The Social Security program's benefits ...
  2. American Dream

    The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version ...
  3. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  4. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  5. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  6. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!