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.