Account Balance

Written By:
Paul Tracy
Updated October 19, 2020

What is an Account Balance?

An account balance is a statement of how much money is in an account.

How Does an Account Balance Work?

For example, let's say John Doe deposits $100 into a new bank account. He withdraws $45 the next day. Then he deposits $20. His new account balance is $100 - $45 + $20 = $75.

Why Does an Account Balance Matter?

An account balance can also be the amount owed to a creditor. For example, if John Doe gets a new credit card, buys patio furniture for $1,000, and charges his $150 dinner out, his account balance on his credit card is $1,150 (and he has only $75 in his bank account, so he might have a big problem).