Credit card users are generally aware of the Credit Card Statement. If you are holding a credit card you must be receiving your credit card statement on a monthly basis. How many of you have the practice to read credit card statements thoroughly? Perhaps, No one! In most of the cases, it is seen that credit card user look at the final amount and make payments. Even in some of the cases, people have set auto-debit from the account. A habit of not going through the credit card statement thoroughly can prove to be costly. There may be the wrong amount, hidden charges or unknown entry.
A credit card statement includes a whole lot of information. If you ignore reading bills due to lack of understanding or knowledge about terminology used in the statement, here is a complete guide about reading and understanding credit card statements.
Credit Card Statement – How to Read and Understand?
Credit Card statement contains multiple sections and terminology. A detail explanation of each section is given below.
Payment Due Date
The most important thing you need to check in the statement is the payment due date. The reason is late payment fees and interest are applicable if the due amount is not paid by the due date. The interest amount is the percentage of the outstanding amount which is fixed for a credit card. The late payment fee differs from bank to bank. The late fee will be charged only if you fail to pay the minimum amount due.
Any failure in making payment will be recorded in your credit history and adversely affect your credit history.
The statement date is another important terminology. The statement date is a date, on which credit card issuer generates the credit card statement. This data is used to calculate the interest amount if you do not pay the outstanding amount by the due date. So, if interest is charged by the credit card issuer and you want to tally the interest amount you can do that by using statement date.
Your statement period is usually written in the topmost corner of your statement. The statement period is important if you want to use interest-free days. Calculation of interest-free day starts from the first day of the credit card statement mentioned in the statement period.
Cash Limit/Credit Limit
Most of the credit card statement contains a credit summary section. This section provides detail of credit limit and available credit. The credit limit is the maximum amount you can borrow by using this card. The credit limit is based on your income profile and your payment record. If you maintain a good payment record it will help you in increasing your credit limit.
Total Amount Due
Total Amount Due is the total outstanding amount due to your credit card. This means it is an amount you owe to credit card company. This amount includes interest rate and all applicable fees.
Transaction detail is the section that provides complete information about every transaction. All purchases and payment done using a credit card will be shown in this section. It will also show you currency detail and total amount. You should look at this section carefully to spot any errors.
Most of the credit card statement contains a separate section showing reward points. The reward points include a summary about a point earned, point redeemed and point balance. You can do redemption of points on a need basis.
Some credit card statement also shows separate charges section. This section includes charges such as late payment fee, credit card annual fees, etc.
What to do in case of an error in Credit Card Statement?
If you identify any errors on your statement first thing you should do is contact your credit card provider to report and solve the issue.
In case you find an error in transactions or if your card is misused from fraudulent transactions, you should immediately block the card by giving a request to the credit card provider.
You might be thinking that the credit card statement is an ordinary bill that you need to pay at the end of every statement period. However, it’s important to go through the credit card statement thoroughly to find out an error if any.
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