When we get our credit card statement at the end of the month, our eye usually goes right to the balance. But what about the other numbers, boxes and text? We never quite pay attention to what those bits of information mean, because we write them off as just being additional, unnecessary details. However, these numbers have their own purpose, even if we don’t consider them to be the most immediate or urgent details on our bill.
Though the layout of statements vary, they all contain the same components.
1. Summary of account activity: This lists the transactions that have taken place on your account, including your previous balance, payments, credits, purchases, cash advances, balance transfers, fees, interest charges, new balance, the last day of the billing period, available credit, balance over the credit limit, and amounts past due.
2. Payment information: This section includes your total new balance, the minimum payment amount you should pay, and the date your payment is due. Your payment is considered timely if you pay by 5:00 P.M. on the last day it is due. Also, if you mail in payments and the payment due date falls on a holiday or weekend, it is considered timely if it arrives by 5:00 P.M. on the next business day.
This section also includes your late payment warning and minimum payment warning. Your late payment warning notifies you of any additional fees and the higher interest rate you may be charged if you are late in making your payment.
Your minimum payment warning is actually incredibly handy, and gives you an estimate of how long it may take you to pay off your credit card balance if you only make the minimum payment due each month. It also gives you an estimate of how much in total you will pay, including interest, if you pay off your bill in three years (and make no additional charges).
3. Notice of changes: Interest rates and other changes to your account terms are shown here. As you can see, the statement we supply does not have any changes made to it. However, if it did, you would see two summaries of changes, one to your interest rates (e.g., “You have triggered the Penalty APR of 18.99%, this change will impact your account as follows:”), and changes to your account terms (e.g., “The following is a summary of changes that will be made to your account terms … for more details refer to the booklet enclosed in your statement.”).
4. Transactions: You probably know this section of your statement very well. It’s a list of all the transactions that have taken place since your last statement, and includes payments, purchases, credits, cash advances and balance transfers. Always check this list to make sure you recognize all of the transactions.
5. Fees and interest charges: As a rule, credit card issuers must list the fees and interest charges in a separate section on your bill. Interest charges are required to be listed by type of transaction.
6. Year-to-date totals: Shown above, your year-to-date section totals your fees and interest charges for the current year. You can sidestep some fees by paying on time to avoid late penalties and managing how much you charge.
7. Interest charge calculation: By all the bank reviews we get, we know our readers hate surprise fees. That’s why banks are required to list a summary of the interest rates charges depending on account balances and varying transactions.
8. Rewards Summary: If you participate in a rewards program, your rewards balance and information is given on your statement.
- Previous balance: The outstanding balance you owed for last month’s billing cycle.
- Payments and Credits: This section reflects your payment and how it was applied to your credit, and can help you keep track of how your credit is being paid down. For instance, if you returned a purchase you bought with your credit card, you’ll want to make sure whether you got that credit back. Another hypothetical example is if you sent a check to be applied to paying off your credit balance. You can double-check whether your bank has applied the payment correctly.
- Purchases: The details of what you purchased and the amount you borrowed.
- Cash advances/cash access line: A cash advance is a service provided by your credit card issuers that allows you to withdraw cash at an ATM, a bank or other financial institution. You can withdraw up to your credit limit.
- Balance transfers: A balance transfer is when you transfer balances on your existing credit cards or loans to another credit card account. The motivation for making a balance transfer is that you can switch it to a card with a low APR, meaning that you can pay off your balance with less or no interest.
- Fee charges: Fees are penalties, such as a late fee, over-the-limit fee (if you charge past your limit), and other miscellaneous fees, such as credit card insurance. Creditors can charge fees for services the customer isn’t even aware they’re paying for, so be sure to take a good hard look at the fees you’re being charged.
- Due date: This is the date your payment must be made by, or else you’ll face interest charges.
- Interest charges: When you don’t pay your balance off each month, you pay interest. The higher the APR rate, the more you pay.
- New balance: How much you owe this month for your transactions and purchases.
- Available credit line: Your credit limit, minus the balance you owe.
- Balance over the credit limit: If your outstanding balance exceeds your credit limit (you could be charged a fee).
- Amounts past due: The balance you still have yet to pay as of your last due date (you could be charged late fees, have an interest rate increase, and/or your credit limit could be suspended).