The Importance of Reading and Understanding your Monthly Credit Card Statement
Understanding your credit card statement should be on your list of things to do each and every month. Reading and understanding your credit card statement can accomplish a few things:
· It can eliminate mistakes or inaccuracies on your bill.
· It can provide insight regarding your spending habits.
· It can provide you with valuable information regarding your card’s fees and interest charges.
However, each creditor’s monthly statement can look markedly different, making the process of understanding each creditor’s statement a bit complicated at times.
Although credit card statements may appear different, they all contain the same, basic information. Here’s a breakdown of what you may find on your credit card statement:
New purchases – New purchases consist of any new purchases you made since the end of your last billing cycle. Make it a point to learn the billing cycle on your credit card so that you can better understand all of your new charges.
In addition, make it a point to keep all of your previous month’s receipts so that you can easily check your monthly statement for accuracy.
New charges – Besides purchases, you may see new charges appear on your credit card statement. This can be late payment charges, over-the-limit charges, cash advance charges or balance transfer charges.
Finance Fees/Charges – These charges are associated with cash advances, purchases and balance transfers, and are usually separated as such. Pay close attention to these charges to make sure that your interest rate charges are accurate for each type of charge. For example, most creditors will assess higher interest charges for cash advances, or they may be offering a low, promotional rate on balance transfers.
Previous Balance – Your previous balance is the amount owed on the card at the end of the last billing cycle.
Payments/Credits – Any payments or credits from your last billing cycle should appear separately on your statement. Make sure your payments are applied properly so that you don’t pay unnecessary finance charges.
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