Demystifying Your Monthly Credit Card Statement

Credit cards give you the convenience of making cashless payments while shopping in the stores and also shopping online. Many credit cards have associated reward points which can be redeemed for interesting gifts and discounts. Hence, many people prefer to get a credit card.

However what people don’t tend to do is to read their monthly statements carefully. Not doing so can have serious consequences. The most obvious one being that you miss the due date for making the payment and you get a fine for the mistake. It is just not a late payment fine, but also a steep interest on the amount due. It is always advisable that you go through your credit card statements in detail.

For some people, the details in the statement is itself such a big mystery that they prefer to avoid it. This article should help you understand the basic heads in your credit card statement.

1. Account/ Card Number: This is your credit card number or a unique bank account number associated with your credit card. The credit card statements may have either or both of these details.
2. Name & Address: This is your name and your present billing address.The address is important as all the billing information is sent there. If you ever decide to move, make sure that you inform the bank to change the billing address. Many times online banking sites may use this to verify the authenticity of your credit card payment.
3. Reference/ Bill Number: This is a unique number for your bill. This number may be explicitly mentioned under the header or it may be printed separately at the top of your bill. You can use this number for any clarifications or issues that you may have with your statement. It is also useful in referencing your bill payments should a conflict arise in future.
4. Statement Date & Due Date: The statement date is the date when the statement was prepared. The due date is the date by which you have to pay the bills if you don’t want to attract any additional charges and affect your credit history.
5. Credit Line/ Limit & Balance: The credit limit or credit line is the maximum that you are allowed to spend with the credit card. If you are just starting and don’t have a strong credit history, you’ll get a lower credit line. With prompt payment of your bills you can extend the limit. However, don’t extend the limit beyond what you need as it increases the risks in case of stolen card. Besides, increasing the limit is free and just a phone call away, you can do it whenever you please, so exercise caution. The Credit Balance is the unspent amount in your credit limit that you have not used for the month.
6. Minimum Payment Due: This is a good aspect of the credit card, especially if you have a temporary financial problem. You don’t have to repay the complete amount that you spent during the month to maintain good credit history. You just need to pay this minimum amount (around 5-20%) to build your credit history. Though you would be paying an interest on the rest of the amount, it at least helps you tide over the financial crisis in the short term.
7. Reward Points: If your credit card has an associated reward points program, this section would show you the total points that you have earned till date.
8. Transactions: This is the list of all the transactions you made with your credit card for the given duration (month).

Thus you see that a credit card statement is a good collection of relevant information about your monthly activity. Use this statement to compare your expenses with what’s mentioned in the statement and that allows you to keep a tab on things. If you have any discrepancies, call the company immediately and get it sorted out.

Tips on Picking a Good Student Credit Card

Credit cards have become the preferred choice for making payments, paying of loans, transferring or consolidating loans, etc. Adults as well as students can benefit from these cards. The adults generally have the financial security to experiment with a few cards before picking the one that suits them the most. But as a student, you may not have this privilege. You must make all attempts to get the best card compatible with your needs in the first attempt so that you don’t have to worry about it during your studies. After all, a credit card is supposed to make your life simpler not tougher. So what should you look for in a credit card company?

• Interest Rates
  The most important aspect in any credit card is the Annual Percentage Rate (APR). This is the interest that you would have to pay on your purchases on the credit card in annual terms. Obviously a lower interest rate is preferable. Hence hunt for cards with low APR. A higher APR could mean that you are expected to pay higher interests which can be financially taxing for you.
• Charges
  Many cards actually have an annual charge, an amount you have to pay the credit card company for providing you that service. Pick the ones with lower or zero annual charge. Other charges include late payment fees. This is extremely important and is typically very steep with almost all credit card companies. These fees could transform your credit card from a financial convenience to a financial crisis. Late payment not only affects you financially, but also messes up your credit history. An excellent way to avoid them is to avoid late payment. Lastly, your over limit fees. Make sure what the credit limit on your card is, and stick to it. If you are careless, you will exceed your limit and that can attract more fines and interests. These are avoidable expenses so you must avoid them.
• Introductory Offers
  Most credit card companies come up with dream offers. You would have very low APRs or even 0% APR, no annual charge, etc. Don’t pick the card based on the introductory offer alone. Make sure that you look at the duration of the offer and the charges after the offer. A sweeter introductory offer doesn’t always translate to a sweet credit card scheme after the offer period – hence the longer the offer period the better. Typically this offer period lasts for 3-6 months or even a year.
• Grace Period
  This is an important aspect of your credit card. The grace period is the interest free period during which you can repay the money spent with the card without any interest. In short, if you repay in the grace period, your credit card is literally your plastic money. The longer the grace period the longer you have to repay the bill with no additional charge, hence preferable.
• Reward Points
  Many credit card schemes have reward points associated with them. This is probably the only aspect where you don’t have to be cautious while picking the scheme. You just need to maximize your benefits with this clause. Hence, it is also a criterion that you must consider after some of the others mentioned above. Some cards may give you points that you can redeem at your favorite store or purchase something that you like, prefer such cards over others.

Lastly, always read the fine print before signing up for any card. If you can’t understand, then ask for help. But make sure that you are aware of all the terms and conditions before you enroll for a credit card. Also keep track of what you spend and pay off your bills quickly. Most credit card companies support online banking facilities to aid you in these steps.

Stolen Credit Card? Protect Yourself.

Credit cards can be your most convenient means of making payments. The explosive growth in credit card usage and the host of plans that are available in the market today are a testament to its popularity and comfort of use. The use of credit cards was for the elite class at one point in time, but today it has cut across all social strata with almost everyone using a credit card for the regular purchase. Not just adults working in regular jobs but even students in colleges and universities can now avail a credit card service. This obviously helps them develop the habit of using credit card for their regular purchases. Besides, starting early they can learn the good habit of paying the credit card bills on time and improve their credit history.

The convenience that credit cards provide also come with some risks. They can be easily stolen and misused. This is a major concern for anyone and everyone. The risk is heightened with students as they tend to be relatively more carefree at the young age. Hence along with good spending and bill payment habits they must also inculcate the habit of securing their cards.

The first point is to keep the card in a easily accessible yet safe place. Typically it is the wallet or the purse. The students must ensure that they always have their credit cards close to them, under their supervision. If they have to leave it somewhere then they must keep it in a secure place – like a locker. This precautionary habit must become second nature to them and it is best to start early.

Despite all your vigil, there are chances that you lose your card. Sometimes it may get misplaces when you are worked up or even get stolen in a crowded place. Regardless of how you lose it, you must immediately report the lost card to the credit card company. Let them know that you lost your card and would like to stop all payments with that card. This basically helps you limit the damage if someone else starts using your card.

However, blocking the payment is not your only tool for damage control in case of stolen card. Almost all credit card companies offer a liability cover which means that irrespective of the unauthorized amount spent with your card, you are liable to pay only a fixed amount. For adults this may be somewhere around $50, while for students they may even get a $0 liability – meaning they don’t pay anything for unauthorized expenditure.

Stolen credit card is not the sole source of unauthorized spending. Phishing is another source where you could end up giving your credit card numbers unknowingly to thieves online. A good protection against this is exercise caution while disclosing your information online. Always look for the https at the start of any website link before entering your credit card information. Fortunately many of the modern browsers have special address bar colors and indications for the secured site. Be well versed with these to make online transactions easier and safer.

Your credit card is linked to your credit history which is more important than the money that you spend with the card. Hence, a stolen credit card is not just monetary risk, but also tantamount to stolen identity. Identity thefts are very serious crimes that can affect the individual adversely. Hence, this is another important reason that your take good care of your credit cards.

Recent Trends in Credit Card Spending

Credit cards are one of the most effective and practical solutions to hit the finance markets. Due to the increased convenience the number of credit cards in the market and the number of institutions issuing them has been steadily rising.

Credit cards allow you to make purchases without having to carry money around – which is safer and more comfortable. Besides, the biggest beneficiary of the credit card has been the e-commerce and online transactions. Credit cards allow you to pay for goods and services online. This means that you can actually shop from the comfort of your house.

Reports show that actual retail credit card spending in US between January and October rose by 9% from 2007 to 2008. This is a classical example of the tremendous growth that credit card market is experiencing. Over the last decade the credit card spending has seen an almost exponential growth with 100+ million transactions being executed monthly on a global basis. In 2008 over a $100 billion was spent in the US alone, showing the kind of scale that credit card market is achieving.

It is intuitive that current economic crisis would have an effect on the spending. This is seen in the statistics between 1st November to 23rd November spending trends in 2007 and 2008 in the US. There has been a dip of around 4% between these two years in the US.  Experts believe that the cost conscious customers may have held back on the spending with the Thanksgiving sales nearing. This is a good example of stiff economic conditions making the consumers take precautionary measures in spending. But this would not have been a credit card trend alone. All other forms of spending would have seen a similar dip during this period due to similar reasons.

The holiday season shopping typically sees a surge in the number of transactions as well as the amount of money spent. The Christmas season is one of the peak spending seasons as more and more people purchase gifts, chocolates and food for the celebrations. It is not just the purchasing that is fueling this growth in credit card transactions. There are many more uses of these cards. Some people look to consolidate their outstanding debts into a single credit card.

Thus it is clear that credit card was and continues to remain a growing market with astounding scale. To continue this growth most companies are coming out with some of the best marketing plans and schemes. Even within the realm of credit cards, the idea of reward points has been quite revolutionary. If you own a rewards point card, you accrue points every time you use your card. These points can be exchanged for gifts, discount coupons, additional gas or air miles, etc. Another variation of this is the use of cash back, where instead of reward points you actually get back some hard cash.

Thus the trends in credit cards have been very promising. The sheer convenience that these cards offer is reflected in the increasing spending trends despite slow downs in all other facets. Credit cards are here to stay for a long time.

Credit Cards – Excellent Payment Alternative for Your Needs

Credit cards have been one of the major revolutions in the banking and finance domain. Their impact has been quite significant on the manner in which companies conduct their businesses and even customers conduct their purchases and shopping.

Today it is not uncommon for people to go online to shop for almost everything right from air line tickets, to rent cars, to book hotels, book vacation plans, order food for home delivery or take out, refill their gas, and also make all other kinds of payments like monthly rent, utility bills and even repayment loan installments. Credit cards have become an inevitable part of a modern urban person.

Not to be left behind the credit card companies actually have come out with host of credit card schemes that provide the customers with various benefits depending on their style of expenditure.

It is tough to ascertain whether the various offers from credit card companies triggered its popular use among masses or vice versa. It is like the “Chicken and Egg” situation. But the point is today the market is bursting with all kinds of credit card users and commensurate diversity in the kinds of credit cards too.

It is typical for people to own a vehicle for transport. This would mean that almost everyone needs to refuel their cars. Most credit card companies have exploited this segment with a petro card that rewards the customers for purchasing the gas with their card. Similarly, mobile professional also tend to use air transport frequently and stay at various hotels and lodgings and also dine out regularly. Special card schemes have been developed for such people that allow them to garner reward points which they can trade for gift cards, discount coupons or even purchase certain items. Some cards also allow you to accumulate air miles which can be redeemed in your next flight booking.

Not only individuals, even businesses and corporate houses have benefited from the credit cards. Now these companies can provide their employees with corporate credit cards which can be used to pay for all the company related expenses. This is vital as it eases the strain on the employees to segregate personal expenses from business expenses. Not only this, many employees can also benefit from the corporate plans that credit card companies offer for certain companies. These have benefits of reward points, greater credit limits and even lower interest rates.

Lastly if you are someone who prefers to shop for all your needs with credit card and would prefer to get cash instead of reward points, well even this option is available with the credit card companies. You can opt for cash back credit cards that give you a small fraction of the spent amount back to you. So if you are an ardent credit card “swiper”, you could be looking at some decent cash backs in a few months.

A final note of caution – though credit card eases your shopping experience and giving you a stress free shopping alternative there are some steep charges associated with delayed payments. If you miss paying your credit card bills, the steep interest rates would mean you are in debt with bad credit history within no time. Hence use your credit cards prudently.

How to Maximize Your Credit Card Benefits?

Credit cards have now become an indispensable mode of payment. It is not uncommon to find special purses and wallets being designed to hold several credit cards. It is the sheer convenience while shopping and the added benefits like bonus points that really make credit card so essential to the modern lifestyle. However, many people facing credit crunch and financial problems would tell you that it was credit cards that pampered them and led them to their present doom. So it is clear that the credit card is a double edged sword. You can get convenience and comfort but if not used properly it can cause you serious financial harm. So how does one make the best use of credit cards?

Immediate Plastic Cash in Times of Need.

One must understand how the credit cards work and what is the benefit that they offer. Credit cards as the name suggests are credit given to you while making those small purchases while you are shopping.

They have a dual goal

1. To give the non-cash alternative for your shopping convenience
2. To let you make a payment in advance in case of temporary cash shortage.

Your use of credit card must be restricted to these two uses alone. If you don’t want to carry wads of dollar bills in your wallet while shopping, use a credit card. Besides, if you need to buy something urgently, but don’t have enough cash in your bank account to pay for it use the credit card – only if you can afford it in the first place.

Credit Card is Not Free Money

The convenience that credit cards provide is that they de-link our financial capacity from our actual purchasing capacity. If you had allocated just $400 for your monthly shopping, and used cash or a debit card to make those payments, you would not have exceeded the limit. With credit cards, you can spend up to your credit limit and still be left with the $400 in your account. This gives you the false financial safety. The real crunch comes at the time when the credit card bills are mailed home.

Though it is easy to look at credit cards and bank account separately, one must instill this in his mind that it is not true.

Credit Card Interests: The Real Killer

More often than not, it is the money that you spend on credit card purchases, but their interests that lead to your doom. The credit card companies look to tempt you into paying a minimum monthly due to help you keep your credit ratings intact. This is very attractive as you begin to believe that paying just part of the bill is good enough. What you miss here is that the minimum payment only takes care of credit ratings, not the interests. Since you have borrowed credit from the company, you have to pay the interest and these are typically pretty steep. If not checked in time, your interests would grow too fast for you to handle.

Besides, paying just the minimum monthly due does not really keep your credit score intact. It adds to the balance to credit limit ratio. A larger ratio affects your credit ratings adversely. Thus, you end up losing on both the counts.

So if you really want to make the most of your credit cards, settle the complete bill every month. This way you only pay the company whatever you lent from them and still enjoy the convenience for shopping with credit cards.

College Student Credit Cards: A Boon or a Bane?

Credit cards have changed from the rich man’s affluence symbol to almost an inevitable form of payment. With growing popularity of the credit cards, the companies are now looking to target various sections of the society. The college students are good target audience for credit cards in many ways  - some good and some bad. Regardless of the impact a credit card has on the student’s financial status it is great for the credit card company.

It is the student’s responsibility to ensure that if credit card company is benefiting from him / her using the credit card, he or she must benefit equally too.

Credit Card a Boon

College is a great time to own a credit card. It immediately gives you a credit history. You can build on the credit record with discipline and good habits during the student days. Once you graduate and come out in the market to work, you already have an excellent  credit history and getting your firs card, first house or even a plasma television would not be a problem for you.

Besides, credit card ownership at such an early stage gives you good training for maintaining credit cards in your future life too. The best part about student credit cards is that they tend to have a very favorable set of conditions in terms of low APR, low interest rates, longer grace periods, better introductory offers, etc. These help you take the first steps in handling the credit card more easily. Even if you make minor mistakes you are punished commensurately.

Credit Card a Bane

Credit card can also be an evil tool to be handing out to college students. These students may not be immature, but they are not fully mature to understand credits, and the importance of a good credit record. For them, the credit card is tool to overspend without having the money to do so. If they get this feeling, they would ruin their credit scores even before they start earning. With that goes their dreams of the first car, house, etc.

Students need to understand that credit card bills need to be paid on time and at least the minimum balance must be paid. Though the student credit card interest rates are lower, they are not so low that they would not cause a financial problem to the student who may not be earning enough or earning at all.

Thus it is clear that college student credit cards are a double edged sword. They can help the student financially or destroy the student’s credit history even before graduation. The credit card companies are just focused on getting more clients and charging them interests, so they will never train the student on good credit card habits. It is the responsibility of the parents and guardians to instill this habit in the student. On the other hand, a well trained student in handling and managing credit cards would be   excellently equipped to exploit the credit loans to get the best in his / her life.

Reduce Your Credit Card Rejection Rate

Credit cards are very important form of payment in the modern day. Given the ease and comfort associated with credit card shopping, almost every store and every business today accepts credit cards. So, you can actually live out only on a credit card, without ever having to go to a teller counter or ATM machine to withdraw cash. Well, that may be a slight overstatement today, but it is still quite possible in near future. Obviously this implies that you want to apply for a credit card too. Applying for one is not as simple as filling up a form. If you are not careful, your application would get rejected. So here are some precautions that you can take to reduce this rejection rate.

Understand how the credit card companies verify your application: Your credit score forms an important part of their verification process. The lower your score the higher their risk and hence the lesser your chance of getting an approval.

• Understand Your Credit Score
  You can order a free copy of your credit history for free or for a small fee from the credit bureau annually. Go though your credit report and look at your ratings. If you have good ratings, it means that you have a better chance of getting an approval. If you have a poor rating, it is better to work on them before applying for a credit card. Go for credit repair first.
• Apply for Right Credit Cards
  If you already own a credit card, try to apply for a similar card from another company. If you have a healthy payment record with a particular category of credit card, your chances of getting a similar one is pretty high. Hence try to stick to your category or switch to a lower category. Sometimes going for a higher category can lead to rejection. Alternatively, you could look at secure credit cards, if your ratings are very poor. Since you secure the credit limit with a payment to the bank, the rejection rates are very low with secured credit cards.
• Take Care of Credit History
  Credit history is the most important part of your application for credit card. Unfortunately, it is not something that you can cook up, or produce overnight. It is a history of all your past payment records, missed payments, defaults, collections, etc. It is a comprehensive record of your credit related activities with records as old as seven years (though not more than that). So practice discipline in paying your loan installments, your credit card bills, etc. If you are punctual and diligent in you payments, you will have a better credit record and hence a better chance of getting approval.

Thus, you see there are many ways to improve your chances of credit card approval. Just focus on these points and you would give yourself a great chance to get a credit card approved. Typically, credit card companies don’t prefer frequent reapplications, so avoid trying to apply for a particular card  if it gets rejected repeatedly.