Your credit card statement includes a summary of how your credit card was used during a billing period. If you’ve ever had to read credit card statements, you are aware of how difficult it can be. Various terms, numbers, and percentages on credit card statements determine your overall credit card balance. Here we’ve put together a few things you should take into account when reviewing your credit card statement.
Observations Regarding Your Credit Card Statement
Credit cards are a great source of funding. They enable you to improve and raise your credit score to provide you with financial flexibility. If you use a credit card, it’s important to understand the statement you get at the end of your billing cycle.
Banking Charges
You might wonder from time to time how your credit card statement ended up being higher than you expected. This could happen as a result of certain bank fees, such as interest charges, late payment penalties, foreign currency markup fees, cash advance fees, etc., so be sure to keep an eye out for such extra bank fees.
Minimum amount due
The card issuers will let you pay a small sum to avoid the late payment fee, in the case where it appears that you won’t be able to pay the full amount due. You can choose to make a monthly payment that is less than the full amount due with all credit card companies.
It only makes up to 3% to 5% of the total amount you owe the bank, this sum is generally small when compared to the total amount. To avoid falling behind on your payments and if you are unable to pay the full amount due, you should only make the minimum payment as a last resort.
Overall amount due
The total amount due, as opposed to the minimum, consists of service charges, penalties, interest on the outstanding balance, any relevant late fees, carryover amount from prior billing cycles, and other charges. To avoid paying any extra costs, such as interest or prepayment penalties, you must check for them in your credit statement.
The due date for payment
The payment due date is one of the most important items to check for on your credit card bill statement. It is the date by which your fees must be paid. If you pay by check, it might take up to three business days for the payment to be processed, which will cost you interest and a late payment fee. Because of this, you must confirm the due date and send the payment as soon as you can.
Availability of Credit Limits
The limit on a credit card is determined by several factors. If you’ve never used the service before, your credit limit will be lower. The cardholder is not allowed to go over this cap, which the bank sets. Some providers allow consumers to exceed the limit depending on the terms and conditions. Banks usually recommend staying within the limit set by banks to avoid debt traps.
Account Overview
The account summary on your Credit Card Statement shows all payments you made during the previous billing period, interest charged on the past due balance, any fees or charges, and the overall sum owed. You will also find the days left in your billing cycle, the statement close date, and your credit limit.
Cashback or Points for Rewards
On almost all of their purchases, credit card users can take advantage of some cashback or reward point offers that come with every credit card. Your statement also shows the number of reward points or cash back for a billing cycle. So that you can use your reward points for the effective approach before they expire, and you can keep records of the validity of your reward cards.
Notice for Delayed Payment
The minimum payment must be made to avoid a late payment fee, and this warning will be included in your card statement. This warning will also include information about late payment penalties.
Conclusion
A credit card statement is a detailed account of each transaction made on your account during a specific period. It also shows any payments, credits, interest, and charges you have obtained throughout the period in addition to your account balance, minimum payment due, statement balance, and due date. We hope that the information above has made it clear how important it is to regularly review your credit card statement.
