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. Per Transaction Fees

    An expense a business must pay each time it processes a customer’s ...
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. Why is it beneficial to innovate financial models and techniques used in quantitative ...

    The majority of consumers use credit cards at some point during their lifetimes to finance major purchases, earn rewards ... Read Full Answer >>
  3. How can I use quantitative analysis to evaluate investment decisions if I don't have ...

    While there are a few legitimate companies advertising that they can consolidate credit card debt, most are illegitimate ... Read Full Answer >>
  4. What are some common models that practitioners use in quantitative analysis of equity ...

    Credit cards can be a helpful component in reaching a financial goal or financing some of life's bigger expenses. Carrying ... Read Full Answer >>
  5. What are some reasons banks deny applications for checking accounts?

    Consumers and businesses use credit to finance major purchases or emergency expenses that exceed regular cash flow. Credit ... Read Full Answer >>
  6. What are the differences between debit cards and credit cards?

    Debit cards and credit cards work in similar ways. Both carry the logo of a major credit card company, such as Visa or MasterCard, ... 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. Personal Finance

    5 Times Cash Rewards Credit Cards Come In Handy

    Using a credit card with cash rewards during emergencies can help you get through tough times, buy you time to pay off costs and even reap a cash reward.
  5. Credit & Loans

    American Express's Main Competition

    American Express competes with Visa, MasterCard, and Discover Financial Services in the credit card space. It also competes with banks to draw consumers.
  6. Credit & Loans

    Credit Cards That Will Get You First Class Flights

    It's getting harder and harder to be upgraded to first or business class on airlines. Here are some credit cards that may help you get those premium seats.
  7. Forex Fundamentals

    Bitcoin Transactions Vs. Credit Card Transactions

    We provide an overview of the differences between bitcoin and credit card transactions, and the advantages of using one over the other.
  8. Credit & Loans

    Top Credit Cards For The Ultra Rich

    Only a few people qualify for these elite cards. The question is, are the lush perks big bucks can buy you worth the cost?
  9. Credit & Loans

    The Pros & Cons Of Personal Loans vs. Credit Cards

    One is not like the other. We help you decide where to borrow money from.
  10. Credit & Loans

    How Is Cashback Profitable For Credit Card Companies?

    Cashback rewards are not as beneficial to the consumer as they might initially seem.

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  3. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  4. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  5. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
  6. Risk Premium

    The return in excess of the risk-free rate of return that an investment is expected to yield. An asset's risk premium is ...
Trading Center