A credit card statement is the piece of paper you receive after a credit billing cycle has lapsed. It is often sent once a month and contains a run-down of the purchases you have made with your card within a particular billing cycle. Apart from the purchases, it may also contain other items, such as the amount that you need to pay, interests incurred, cash advances made, previous balances, previous payments made and so on.
Understanding Your Credit Statement
It is your responsibility as a card holder to know and comprehend everything that is written on your credit statement. The billing report can vary from one company to another, but the same terms are often used. Below are some of the important elements that you should understand in your monthly billing statement:
- New charges - Also written as "purchases," by some issuers, the New Charges section of the statement contains information about the purchases you have made within a particular cycle. It is here where you will find your total payables for the particular month.
- Account summary - This includes your account number, your total credit limit, and your available credit limit. This is also where you can find the statement date in which the bill has been issued.
- Payment summary - This part contains information about the required minimum payment that you need to make if you cannot pay the full amount of your used credit. You can also find here the previous payment you have made as well as your due date of repayment for that particular cycle.
- Previous balance - This defines your outstanding balance if you did not pay in full during the previous month. Make sure that it is accurate to avoid paying more than what you owe.
- Payments or credits - This should contain the amount of money you paid during the last billing period. This should also include the amount of credit you received from returned purchases if there is any.
- New balance - Located in the Balance Summary section, this tells the total amount that you need to pay for the billing cycle. You can choose to pay it in full or pay only the minimum required payment. Note that choosing the latter will incur interests automatically.
- Finance charge - This states the fees and interests charged on your account for the period. There are credit cards that have a minimum finance charge. However, your creditor may not require you to pay for this amount if you do not carry a balance.
Your credit statement can help you keep track of your monthly expenses and the payments you have made for the card. Scrutinize this document carefully once you receive it to make sure that you have not been over charged. Checking it can help you spot discrepancies and unauthorized usage of your card.
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