Making Sense Out of Your Credit Card Statement

What do you do when you receive a credit card statement in the mail or get an announcement in your inbox stating that your statement is ready for your review? If you’re like the average credit card holder in America, you look at the minimum payment that is due and write a check or schedule an automatic payment to cover that amount. That’s not smart. You should be carefully reading every single credit card statement in order to make sure that it’s accurate as well as to make sure that you fully understand what’s going on with your finances and where your money is going. Of course, in order to be able to do that, you need to know how to make sense out of your credit card statement.

The first thing that you’ll want to review on your credit card statement is the basic factual information related to the account. This includes the account number, the billing information and your personal profile information. This is typically available at the top of the credit card statement and needs only a quick look to determine that all of the information is correct. This is also where you’ll see the minimum payment amount due and the date that it’s due which is important so that you’re not late on payments.

The next thing that you’re going to want to look at is the transaction history. This is the part of the credit card statement that will tell you about each expense on the card since the last statement. You’ll want to review this part of the credit card statement carefully because this is where errors often come up. If someone has stolen your identity, this is where you’ll see it. If a business accidentally charged you twice, this is what will tell you so. Hopefully you kept receipts for all expenses that you can compare this part of the statement against, but at least go through and make sure that each expense makes sense.

After reviewing the transaction history, you will want to take a look at the summary box. This is typically at the top of the billing statement or at the very bottom of the billing statement. This area will show you what the previous balance on the card was, what the payment since that time has been, what the new charges (from your transaction history) are and what the new total balance is. Pay attention to this area. Make sure that your payment and transaction amounts were entered and calculated correctly. This is where you’ll find the total amount owed on the card.

All of this information is important to making sure that the bill is correct. However, there is also information on the credit card statement which can help you to better understand where your money is going. You’ll find that the statement shows a breakdown of the annual percentage rate that is being paid on different transactions. This will reveal the varying interest rates for purchases, balance transfers and cash advances on the card. It will also show you how much of your payment is going towards interest vs. how much is going towards principle. And it will reveal any additional fees that you’ve incurred. Reviewing this information can help you determine whether you’ve got a good card, if you’re having troubles that are incurring fees and other things that will assist you in changing your credit card habits in ways that benefit you.