29 Jan Reading Your Credit Card Statement
Reading Your Credit Card Statement: The Primary Parts of Your Monthly Report
In today’s fluctuating economy, keeping track of your credit and your credit rating is a vital part of tracking your financial standing. An important part of this process is learning to read your credit card statement. Read more about Credit Card Debt Relief here.
The 10 Main Features of Any Credit Card Statement
1. The Reporting Period
Usually listed in the upper, right-hand part of your credit card statement are the starting date and the closing date. Many people believe that the interest-free days start from the date of purchase. This is not always true. Often, although the card might offer a certain number of days without interest, the date of the purchase and the time in the cycle of your statement are important parts of this.
2. Date Payment is Due
This is one part of the card to which you should pay close attention. It is also listed in the upper right-hand corner of your credit card statement. For each billing period, you want to make at least the minimum payment on what you owe. The result, if you do not, is that your payment will be counted late, and it will accrue penalties and added interest. It can also lower your credit rating.
Everyone has a month or two where it is difficult to pay the bills. If you are having one of those months, the first thing to do is to contact your creditor. You can sometimes push the due date off a week or two – especially if it will create a situation where it falls after your payday.
3. How Much Should You Pay
Each month, you are required to pay a percentage of your outstanding balance. This is known as the minimum amount due. Some cards, such as Discover, are intended to be paid off in full each month – so be careful how much you charge for those! Department store cards often fall under this category.
Should you be unable to pay the amount required, you are likely to be charged penalties and possibly extra interest. Therefore, it is in your best interest to pay at least the minimum amount.
4. Late Payment Notices
When you have not paid the minimum balance on your bill, even if you have paid part of it, your card company will send a notice in the mail. They might also begin making phone calls to inquire your status.
When you carry that portion of your bill over to the next month, it will appear in a section on your card that is labeled “overdue.” If it is at all possible, you need to pay off that portion of your bill and pay the current month’s minimum.
5. Purchases and Other Charges
If you use your card regularly, you are likely to have a section that is labeled “New Charges.” Check this section regularly to be sure that the items on there are things that you purchased, and that there are no errors. If you do not check it, then you might wind up paying for something that you did not anticipate or that someone else has fraudulently added to your card.
If you need to dispute a charge, then you need to contact your creditor as soon as you notice it. Delays can mean lack of ability to stop the charge.
6. Refunds and Payments
This section should show any payments you have made as well as credits for having returned something for a refund. Rebates might also show up in this section. Refunds can sometimes take a while to process, so exercise a little patience, but do keep checking for them.
7. Balance at Closing
The balance is the amount that you owe, overall. If you have purchased something large, such as a refrigerator or washing machine, then it is likely that you might carry a balance from month to month. However, the sooner you can pay off that balance, the less the amount of interest that you will owe.
8. Activity on Your Card
The activity on your card is called a transaction. Transactions occur when you buy something, when you make a payment or when your company records a fee or charge, such as identity theft protection or insurance.
All transactions that have occurred during the billing period should be on your statement. There will be a date for each one, a description, the amount, and a reference code. This is where you can view the amounts that have been charged or paid to your card. By matching this against your transaction records, you can quickly discover whether there is an error.
Most modern cards, like bank accounts, can now be accessed online so you can quickly check to see if a change has occurred or if a payment has been posted to your account. Mobile apps make it possible to check your activity and your balance on your cell phone or a tablet. This takes the guesswork out of paying attention to your credit records.
9. Paying Interest
Interest on credit cards, while is often presented as a yearly rate, is usually figured daily. This means that you are paying interest today on the items you purchased last week. More than that, you are paying interest on the interest that accrued yesterday – this is known as compound interest.
Avoiding these interest charges is what makes it so important to understand when interest will be charged on items, and to pay off as much as you can each month. While carrying a balance on your card might help your credit rating, it does not necessarily make the amount that you will have to repay smaller.
Some kinds of purchases will not start gaining interest until after the end of the billing period. Cash advances, by the way, begin accruing interest right away, so if you can avoid them – so much the better.
10. Reward points
Not all credit cards have reward points, but some do. Conditions for earning points vary from card to card, so make sure you know how you can earn points if this is of interest to you. Your points, if any, will show up on your monthly statement, or you can monitor them online. They can be used in different ways. Some can only be spent in special stores, while others are used in dedicated ways – such as frequent flyer miles or discounts at hotels.
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