Understanding your credit card statement
Crucial to staying away from debt is proper financial management. For you credit card, one of the tools at your disposal is your monthly credit card statement. And as with any tool, you need to know it to use it well. Looking at your statement might be not the most interesting thing in the world, but being familiar with your statement and its credit card rates can help you manage your card better and save yourself from getting into debt.
The format and the terms may vary between different card companies, but the basics should be the same. If you look for the common factors that all cards have, understanding your own statement should not be difficult. If there are some terms that are still unclear to you, you should contact your card company to get more information about it.
As with all statements, you have there your basic account information. Things such as account number, the billing period, the date, and amount due. You should also find here your credit and cash advance limits.
Another of the standard sections in any card statement is the balance summary. In this section, you should see what your previous balance is, the total of the payments you made, the new transactions, and your current balance. Here, you get a snapshot of your account history with the credit card rates applied regarding your current balance. It also shows you how near or far you are to your credit limit.
Next is the detailed list of the card transactions that you made for the billing period. You should find here the dates when the transactions were made, reference numbers, and the merchants that accepted them. You should give this area some special attention since this is a common area for discrepancies. This is also where you can check for anomalies and possible cases of fraud. As such, this is an important section to scrutinize. One good practice is to keep copies of all your card transactions and then do reconciliation when the statement comes. This will help you track your transactions more efficiently.
Another important section would be the finance charges section. Here, you can find the credit card rates applied to your account. You should also see here your current APR and it’s monthly breakdown. You should also see here any fees applied to your account such as late payment fees or cash advance fees. Knowing this part of your statement can help you keep tabs on your current interest rate and APR.
As the cliché goes, you should also look at the finelines. These contain information about some of the fields on the statement and the conditions that govern them. You should also look at the back of the statement for additional information and advisory.
If something seems amiss, you shouldn’t hesitate calling your card company about it. If you have a valid dispute, you should also follow it up with a formal letter to your card company. But remember, this dispute won’t happen if you don’t look at your statements carefully. And so, it literally pays to know your credit card statements.