Understanding credit card balances and their impact on finances

A credit card balance is the total amount owed to the credit card issuer, including purchases, fees, and interest. It can fluctuate based on usage and payments. Understanding different types of balances—statement, current, and available—is important for managing finances. High credit card balances can negatively affect credit scores due to increased credit utilization ratios. Keeping this ratio below 30% is recommended, with below 10% being ideal. Late payments can further harm credit scores, as payment history is a significant factor. To manage credit card debt, it's best to pay off balances in full each month. Options like balance transfers can help reduce interest costs. Creating a budget and tracking expenses can also aid in managing and reducing credit card debt effectively.