Available Balance is an important tool used by banks, credit unions and other financial institutions to track the available funds in a customer’s account. It is different from the account balance in that it reflects the funds that can actually be used for payment, whereas the account balance will include deposits that have not yet cleared, resulting in a higher balance than is actually available. Understanding the difference between available balance and account balance will help customers avoid overdraft fees and ensure their purchases are successful.

Available balance is the amount of money that a customer has to spend in their account. This reflects any deposits that have been processed as well as any payments made. An account’s available balance should be updated in real-time, meaning that anytime a customer completes a purchase or makes a payment, the available balance will be reduced by the amount of the transaction. It’s important to note that the available balance may change during the course of a day but the account balance will not.

It’s also important to understand that the available balance may be lower than the account balance. This is due to several factors, most notably pending transactions. If, for example, a customer makes a purchase but it isn’t processed until the next business day, the available balance in their account may be lower than their actual balance because the payment isn’t reflected until the transaction is complete.

Bank and credit card customers should always take the time to check their available balance before making purchases to ensure the transaction will be successful and to avoid costly overdraft fees. It’s important to remember that available balance is the only true reflection of the funds that are available to be used in their account. If a customer’s available balance is lower than their account balance, it’s important that they factor that into their spending.

Understanding available balance is key to budgeting and avoiding unwanted fees. To stay in the know, customers should check their available balance every time they make a purchase or payment and remember to factor in pending and scheduled transactions that may move the available balance slightly. Doing so can help them stay on top of their finances, prevent overdrafts and ensure their payments are successful.