Manage Your Credit Card manage-your-credit-card

How to Read a Credit Card Statement

After receiving your credit card, your credit card provider will begin sending you a credit card statement every month. A credit card statement contains important information such as how much of your credit line you have used and how much you have left to use. Ideally you will want to use your credit card statement to get a quick snapshot of your credit balance and other important details.

Account Information

Account information describes which credit card you are looking at and who the owner of the credit card statement is. If you have multiple credit cards, this section will show you which credit card a particular credit card statement is referring to.

Account Activity Summary

Your account activity summary is a quick snapshot of all of the charges, purchases, and payments you have made or received on your credit card.

All of this activity ultimately leads you to your new balance, which is the total amount that you owe to your credit card provider.

It is important to note your credit card statement’s closing date and monthly payment. Your monthly payment is due by your statement’s closing date if you want to avoid any late fee charges or other penalties.

Payment Information

Payment information highlights the total balance that you owe on your credit card and when your minimum balance payment is due. You want to at least make the minimum balance payment to avoid penalties from your credit card provider. If your payment is late, learn how to remove a late payment.

Account Activity

Your account activity breaks down each past payment or charges that you have made on your credit card.

Looking down your account activity list, you will see each of your purchases within the last few months. Your purchases will not contain an itemized name, but just the date, the establishment you are purchasing from, and the amount of your purchase.

If you have incurred any fees during your monthly billing cycle, they will appear in your account activity. It is important to look here as you want to make sure that you are avoiding any unnecessary charges. It is possible that your credit card provider may have made a mistake, or that you were incurring fees that you were not aware of.

Another section of account activity is a calculation of any interest charged on your credit card balance. If you have an introductory period of 0% APR or did not carry over a balance, you will have $0 of interest charged. Missing a payment, however, will void this promotion and afterward, interest will accrue.

Interest Charge Calculation

If you were charged interest, you should know how it was calculated. This section shows how your interest was calculated using your balance, monthly periodic rate, and any cash advance fees.

Knowing how to read your credit card statement will help you stay on track of how much credit you have left to use and how much you need to pay for your credit card balance. This simple practice of looking over your credit card statement will help you build a good credit history.