How to Check Your Credit Card Statement
Understanding your credit card statement can sometimes be like understanding Calculus – confusing.
Are you taking the time to read your credit card statement every month or simply paying the bill when it rolls in? Here are some quick tips to help you effectively read your credit card statement.
Verify charges and purchases
The first thing you want to check is your “Account Summary” to verify all of the charges and purchases on your credit card statement. It is important to double check these charges to avoid becoming a victim of fraud or identity theft. You may want to gather all of your receipts from the previous month to help you verify your purchases. For example, if you went to a restaurant and paid $13.00 for food, then you should see that amount on your statement. If you see two charges of $13.00, then it may be a double charge. This happens often and can be taken care of by simply calling the restaurant or disputing the charge.
Did you return that shirt you never wore last month to Macy’s? It is important to make sure this return has been applied to your credit card and shows up on your statement. The amount of money that has been paid back to your credit card (from payments or returns for the month) will be shown in the “Balance Summary” section. If it isn’t there, then you may want to double check with your provider to make sure that the payment went through.
Check Interest and fees
You may notice finance charges on your credit card statement and wonder what that means. This is the amount of interest and fees that you are getting charged for each month – keep in mind this number isn’t always the same every month. Some cards only give you a finance charge if you carry a balance each month. If you pay you card in full every month, then you won’t see finance charges being applied to your statement. Some cards have a minimum finance charge that is applied to your statement every month. If this is the case, you may want to consider doing your best to pay off your card in full every month to avoid getting a heavy finance charge.
Know Your Credit Limit and Credit Limit Available
Your credit limit on your credit card statement is the total amount you have to spend on your credit card before any purchases are made – this is before any finance charges, balance transfers or any other fees. Your credit limit available is the amount of money you have left to spend on your credit card. For example, your credit limit may be $5,000 and you’ve spent $3,000; this means the total credit you have available is $2,000. Try your best to never exceed or get close to reaching your limit. If you do exceed your limit, then you may get hit with a big fee at the end of the month; this may also increase your interest and mess up your credit.
NOTE: Your credit card limit can change! If you continue to pay off your balance in full every month, pay over the minimum, or have all of your payments on time, then your credit card may reward your and increase your limit! This doesn’t mean you should spend more than you earn. Keep doing what you’re doing and make sure all payments are on time.
Check Your Payment Summary
Your payment summary is the section of your credit card statement that tells you the minimum payment that you owe for the month, your payment due date, and your current payment due. Try your best to pay more than the minimum each month. Remember, you are not only paying off your purchases for the month, but also interest and fees. If you continue to pay the minimum each month, then you risk falling into deeper debt. The average late fee on credit cards can vary from $20-$35. It is important to always make sure your payments are on-time to avoid fees and risk falling into debt!
Your “current payment due” is the total amount that you owe on your credit card statement. If you choose, you can pay off this full amount each month or pay a smaller amount and incur interest. Try your best to make biweekly payments to your credit card to help you pay off your debt quicker. It is important to make sure you make your payment when it is due to avoid incurring late fees.
APR stands for Annual Percentage Rate (or annual interest on your account). If you are not one to pay off your credit card in full every month, then you may want to keep a close eye on this number. If you have a low APR, then you will be paying less in interest. Credit card companies may change your APR even if you have “fixed” interest rate. You will avoid paying interest if you pay off the full balance of your credit card every month.
Get out of the habit of simply paying your credit card bill every month and consider checking your statement beforehand. If you check your credit card statement every month you will always be in the know. Hey – you may even want to cut back after seeing how much you’ve been spending! Do you check your credit card statement? Is it difficult to read? Tell us your feedback by leaving a comment below.