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What Is the Amount of Money You Still Owe to Their Credit Card Company Called?

Sarah Edwards | January 23, 2023

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Edwards is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Your credit card balance is the amount you owe after all is said and done.

Summary: The amount of money you still owe a credit card company is called the credit card balance. This balance is made up of three factors: your purchases, payments, and interest charges or fees. Before signing up for a credit card, you should consider all the additional charges that may come with it. If you’ve been sued for credit card debt, SoloSuit can help you fight back and win.

If you’re like most Americans, you probably have a credit card. According to the Federal Reserve, 81% of Americans over age 18 have at least one credit card, and 63% of cardholders admit to carrying a balance on their cards sometimes.

Credit card terminology can be confusing. For example, if you have a credit card that you’re making payments on, you may wonder, “What is the amount of money you still owe to their credit card company called?”

It’s called your credit card balance. Your balance consists of the amount you owe your creditors, including principal and interest.

Get help settling an old credit card balance with SoloSettle.

The components that make up your credit card balance

Your credit card balance consists of three factors: the charges you make to purchase goods or services, payments you make to the creditor, and interest charges or fees.

Let’s consider an example.

Example: Chase Bank issues Michael a credit card with a $5,000 credit limit and a fixed APR of 9.99%. The bank waives its annual fee of $50 for the first year. Michael uses his credit card to buy a new sofa and mattress. The total value of his purchase is $2,000. Michael has until the due date of his monthly bill to avoid any interest charges. Unfortunately, Michael doesn’t have enough money to pay off the balance. Instead, he sends Chase Bank $500. After the due date passes, Michael receives a credit card statement indicating that he now owes Chase Bank $1,512.49. How did the bank come up with that total? Michael paid $500 toward his balance; shouldn’t the new balance be $1,500? Since Chase Bank gave Michael a fixed APR of 9.99%, it charged him a month’s interest for the remaining balance on his card after he made his payment. The interest charged is equal to 9.99% divided by 12 months, or 0.8325%. Thus, the bank multiplied 0.8325% by $1,500 to determine that Michael owes an additional $12.49.


That’s a straightforward example. However, calculating the total money you owe toward a credit card balance can be complex, especially if your creditor charges variable or compounding interest or you incur extra fees.

If credit card debt collectors chasing you, check out this video to learn how to swat them away:

There are several factors that can impact your credit balance

There are several elements that may increase the amount you owe your creditor.

Annual fees are popular among many credit card providers. Some banks include a yearly fee along with a lower interest rate. The fee ensures that the bank receives some money for its lending services, especially for customers who tend to pay off the balance of their cards each month.

An APR is the annual interest rate your creditor charges on outstanding balances. APRs can be fixed or variable. A fixed APR remains the same, while a variable APR will change according to its benchmark.

Sometimes, creditors charge customers for withdrawing cash against their credit lines. The cost may be in the form of a special cash advance APR or a specific fee. In some cases, both apply.

Another typical fee that applies to credit cards is a late payment fee. Credit providers charge a late fee if you don’t pay by the due date.

While other fees and interest charges may apply to your account, these are the most common. It’s essential to read your credit card terms and conditions to understand what your creditor can bill you for.

How to avoid charges from your creditor

It’s not always possible to avoid fees from your credit card provider. For instance, if your creditor charges an annual fee for its card, the provider will bill you for it even if you don’t make any purchases.

However, you can minimize your credit card balance. The best way to do so is by paying the entirety of your balance each month. That way, you can reduce any interest your creditor charges you and avoid late fees.

Sometimes, people make purchases on credit, but they can’t afford to repay the creditor the entire balance immediately. In that case, it’s best to pay as much as possible and continue with that strategy until you pay off your card.

What to do if you can’t afford to repay your creditor

If you’re facing extenuating financial circumstances, you might have difficulty meeting monthly credit card payments. You can avoid making your situation worse by contacting your creditor and explaining your situation. You might receive some leniency until you get back on your feet.

If you’ve been sued for credit card debt, you should take it seriously. Don’t ignore the lawsuit, hoping it will just go away. SoloSuit can help you respond to a debt lawsuit and win in court. Here’s how.

  1. Respond to all the claims against you. When you’re sued, you should receive a court document called a Complaint (also known as a Petition in some states) that lists all the claims against you. It’s your responsibility to respond to each claim. You can admit, deny, or deny due to lack of knowledge.

  2. Assert your affirmative defenses. These are legal reasons that you should not be held liable for the debt. For example, maybe the statute of limitations has expired on the debt. Perhaps the amount they claim is incorrect. There are many defenses you can raise in a debt collection lawsuit that will help you strengthen your case.

  3. File the Answer with the court, and send a copy to the opposing attorney. Be sure to file before your state’s deadline. Doing so will help you avoid a default judgment.

SoloSuit’s Answer form includes a section for you to reply to each claim and assert your affirmative defense. Plus, SoloSuit can file your Answer for you in all 50 states.

After following these three steps, you can also reach out to your creditor to discuss a debt settlement option. SoloSettle helps you send and receive settlement offers so you don’t have to deal with pesky debt collectors at all.

Learn how SoloSettle can help you settle your account.

What is Solo?

Solo makes it easy to resolve debt with debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt. SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

SoloSettle can help you contact your debt collector or creditor and negotiate the debt to settle for less, all online. It simplifies and streamlines the process to settling your debt.

No matter where you find yourself in the debt collection process, Solo is here to help you resolve your debt.

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>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

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