How to Read Your Credit Card Statement

The account summary gives an overview of your credit card account status. Here you’ll find your current balance, fees and interest charged since your last billing statement, the amount of credit you have available, and the date your billing cycle closed. This is usually the first section on your credit card statement because it contains some of the most important information.

Payments and transactions that posted to your account after the billing cycle closed won’t be reflected on this credit card statement. However, if you log in to your online account, that balance will typically include your most recent activity. The account summary section also includes the card’s credit limit, available credit and cash advance limit.

Paying Your Credit Card Bill

Your statement will most likely include another section with your payment information.The payment information section lists the payment you must make to avoid late payment penalties. This section includes your minimum payment and payment due date. If you pay less than the minimum or your payment is received after the due date, you could be charged a late fee

Aim to pay off your entire balance every month. Doing so may not be possible right now, but it should be your ultimate goal when it comes to credit card use. Credit card debt isn’t cheap, so try not to carry a balance. Your bill might provide you with a table showing exactly what’ll happen if you only make the minimum payments instead of paying your card off in full each month. If you don’t see a table, take our word for it. Racking up interest is not good for your finances.

Don’t forget to read your statement’s late payment warning, which explains the consequences that come with neglecting to pay your bill on time. There will likely be a late fee if you fail to pay up by 5 p.m. on the due date, or by the following business day if it’s a weekend or holiday. Your credit card company may even raise your annual percentage rate (APR) if you miss a payment date. Your APR indicates how much money you’ll owe in interest if you can’t pay your entire bill by the deadline. The higher the percentage, the more interest you’ll end up coughing up. Late payments can trigger penalty APRs that will really cost you.

Total Minimum Payment Warning

You’ll also see a total minimum payment warning on your statement, which credit issuers must provide to indicate where you stand in paying off your balance. This section shows how long it would take to pay off your current balance if you were to make only minimum payments. It also provides you with how much interest you’ll pay during that time, giving you an idea of how much that payment pattern will actually cost you.

Rewards Summary

If your credit card comes with a reward program, a summary of your rewards will appear on your credit card statement. This section will generally include your reward balance, rewards earned this period, and amount of rewards available for redemption.

Some statements will go into detail about which spending categories earned you points and how many points you earned. This is helpful for cards that earn higher rewards in specific categories, like dining out, groceries or transportation. It’s also helpful for cards with rotating cash-back categories. Understanding how your credit card’s rewards program works can help you redeem and enjoy rewards that doesn’t affect your credit score and help you pick out a credit card that is most suitable for you.

Managing Errors on Credit Card Statements

While your credit card statement should usually be accurate, there are some instances where you might spot an error. If these errors go unreported, they could have a negative impact on your credit history and reduce your likelihood of approval when applying for future loans. This is why it’s so important to keep an eye on your credit card statement.

If you do spot an error on your credit card statement, it’s wise to get in contact with your card provider to report and resolve the issue. If you do this soon enough, the errors might not even make it to your credit file. The simple steps you can follow to report and fix an error on your statement include:

1. If you spot a purchase you’ve not made, contact your card provider immediately.
2. In some instances, the responsibility to prove you’ve not made the purchase is on you, so make sure you have the relevant receipts and evidence on hand.
3. If you feel you’ve been a victim of identity theft or if your card has been used for fraudulent transactions, you should also contact the police as well as your provider.
4. If any such errors make it to your credit report, you’ll have to contact credit reporting bodies such as Experian, TransUnion or Equifax individually to order a copy of your credit report. You can then get in touch with a credit repair agency to help clean up your credit report.

Bottom Line

Credit cards are convenient and using them can be a great way to start building up your credit. Depending on your card, you may also earn points, miles or cash back just for swiping. But don’t let your credit card statement remain a mystery. Being able to read your monthly statement and understand what all the lingo means is key.

Hopefully this post helps you gain a better understanding on how credit card statements work.

Also be sure to check out our own lists of bank promotions and CD tables!