How to Read Your Credit Card Statement

Checking your credit card statement every month is an important financial task. jason cox/Shutterstock

By Ella Vincent From Kiplinger’s Personal Finance

Checking your credit card statement every month is an important financial task.

The statement holds key information. Plus, by monitoring transactions, you can get a sense of where your money is going—and detect any fraudulent purchases quickly.

Here’s how to read the fine print:

• Account Summary

This includes the total amount of purchases and credits, balance transfers, cash advances, any past due amount, fees charged, and interest that has accrued since the last billing cycle. Additionally, you’ll see the starting and closing dates of the billing cycle, which usually lasts 28 to 31 days.

Your credit limit, as well as the amount of credit available to you after subtracting your card’s balance, appears in the account summary, too.

• Payment Information

Perhaps the most important line in this section is your payment due date. Your payment is usually considered to be on time if you submit it by 5 p.m. in your time zone on the due date shown, if it’s a weekday; if the due date falls on a weekend or holiday, then you have until the next weekday to pay your balance.

The payment section also lists the minimum payment due to avoid a penalty, as well as a warning that explains how much you’ll owe in fees and higher interest if you fail to pay by the due date. This section also explains the number of months or years it will take to pay off the balance if you make only minimum payments.

• Changes to Your Account

If your account terms change, those differences are listed here. For example, if your card company increases your interest rate or adds more fees, you’ll be informed in this section and given at least 45 days’ notice before the changes take effect.

• Transactions

This section provides a summary of your purchases and other transactions since your last statement, showing exactly where your money is going, says Ted Rossman, senior industry analyst at Bankrate. Every purchase you made is listed, along with the date of the purchase and identity of the merchant.

Inspect this part of your statement closely for any transactions you don’t recognize, which could indicate fraud. If you see a purchase you don’t recall making, contact the merchant first. If you can’t resolve the issue with the merchant, write a letter to your credit card company to dispute the charge.

Under the Fair Credit Billing Act, you have 60 days after the date the billing statement was sent to you to dispute an erroneous charge.

• Fees and Interest Charges

This section tells you the total amount you’ve been charged in interest and fees for the current year.

• Interest Gharge Calculations

At the bottom of your credit card statement, you’ll see how interest on your payments is calculated. This section includes the annual percentage rate (APR) for purchases, balance transfers and cash advances.

• Rewards

If you have a rewards credit card, this section shows the amount of cash back, points or miles you’ve earned and redeemed.

©2024 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.

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