Your credit card statement might come to you by mail or email. Do you take the time to look at it, reviewing for errors and making sure everything looks right?
Or do you put it in the shred pile, quickly moving on with your life?
If you shy away from your credit card statements, you’re not alone. There’s a lot happening on those pages, between the ultra-fine print and numbers galore.
A credit card statement can also be a source of anxiety: a reminder of money that was spent throughout the month and of possible payments past due.
But, there’s also a lot of important information on a credit card statement.
If you spend a little bit of time learning to read your credit card statement, it won’t be nearly so overwhelming—you may even find it helpful in understanding how to manage your credit. It may be the catalyst you need to pay off your credit card debt.
A credit card statement includes information about rates, fees, transactions, payments, and any changes to the rules and regulations of your card.
Every credit card provider’s statement will look a bit different but will share similarities in the most important sections.
So this is just a high-level overview of some common facets of a credit card bill—including basic examples of what a credit card statement may look like; your statements will almost certainly vary, and may not contain every section outlined here. Think of this article as simply a jumping-off point to learning more about your own credit card bill.
How to Read a Credit Card Statement
This section is an overview of all transactions that have taken place on your credit card account during a billing period. Often, the section begins with the account’s previous balance. Added or subtracted to the balance are additional purchases, interest charges, fees, balance transfers, credits, or payments.
The result is the new balance, which takes into account all of the activity for that billing cycle. The billing cycle’s dates are typically also included.
Note that only activity from the current billing cycle will be reflected on the statement. This means that your statement may reflect different numbers than what you see when you look at your account online.
Your online dashboard will likely display a current balance that includes transactions that happened after the credit card statement cycle closed.
You may also find information on the card’s credit and cash advance limits in this section.
In this section, you’ll find information on what is owed for the billing cycle. If you look at no other section on your credit card statement, you’ll probably want it to be this section.
In addition to the total balance on the card at the end of the cycle—sometimes called the “new balance”—this section will include information on your minimum payment for the month and the date the payment is due.
If you fail to make the minimum monthly payment on time, you may be charged a late fee. Missing a payment might also trigger a higher penalty annual percentage rate (APR), and could potentially negatively impact your credit score.
Paying the balance in full each month typically avoids accumulating interest payments. To do this, you would pay off the full “new balance” amount listed in the payment information section. (You may also have the option to pay the full “current balance,” which includes transactions made after the close of the billing cycle.)
Late Payment and Minimum Payment Warnings
Credit card statements typically have sections that state what happens in the event that a minimum monthly payment is not received by the due date listed.
The late payment warning generally includes information on the penalty APR (if applicable) and the late payment fee.
The minimum payment warning section explains how long it will take to pay off a credit card balance and how much interest you will owe if you only make the minimum payment.
It is possible to pay off a credit card balance by only making minimum payments, but the process can be slow and cost more in the long run when you factor in compound interest.
The minimum payment warning section may include details for an expedited payment schedule such as three years, or 36 monthly payments. This can be a useful comparison if you’re unsure of just how much in interest charges you’ll save by making more than the minimum monthly payment.
Another way to explore interest costs over different repayment periods is by using a credit card interest calculator.
If you carry a rewards credit card, the most fun section to review on a credit card statement can be the rewards summary, which details how many points or miles are able to be redeemed for cash or travel.
This section typically contains information on how many points or miles were accumulated over the most recent billing period, along with the number of points that are available to be redeemed currently.
Credit Counseling Notice
Your credit card statement may include information for nonprofit credit counseling. If you are having a difficult time managing your credit, you could consider utilizing this resource.
These programs are typically long-term solutions, however, and may not be able to help if you are in immediate risk of missing a payment.
If you are unable to make a payment, calling your credit card company and asking about your options may be helpful. Credit card companies may have ways to help.
Notice of Changes to Interest Rates and Other Changes
If an action on your account triggers some sort of change to the account, there is usually a section dedicated to explaining this change (or potential change). For example, if a missed payment triggers the penalty APR rate, you must be notified of the change.
Similarly, if there are any other major changes to your account, rates, or fees, you may find more details in this section.
This section is a list of all transactions that occurred during a billing cycle including purchases, returns, and any other activity that would affect the running balance on a credit card. Each transaction typically includes information about the vendor, the date the transaction was made, the date it was posted to the account, and the dollar amount.
This section will only include information from the transaction period. Transactions that happened after the billing cycle will be included in the next period’s statement.
You may want to consider making a regular habit of checking your transactions each month for errors or fraudulent activity. If something looks suspicious to you, report the activity to the credit card company.
Fees and Interest Charges
Credit card statements typically have a section dedicated to fees and interest charges. Interest charges are listed by the type of transaction for which they apply.
For example, you may be charged a different interest rate for purchases than for balance transfers or cash advances. Here, you will be provided with the calculation for each.
Credit card statements may also include a year-to-date total of all fees and interest charged.
Successfully managing your credit card is not something that happens overnight. Learning to read your credit card statement is a great start.
But if you’ve got big goals—like paying off your credit card debt—you may just need an extra boost.
One option to climb out of credit card debt is to take out a personal loan. A low fixed-rate personal loan could be easier to manage than multiple different credit card payments.
SoFi offers personal loans with low rates and no fees (that means no application or origination fees) for qualified borrowers. Plus SoFi knows that navigating your finances and learning credit card jargon can be tough, which is why all SoFi members have access to helpful financial advisors, at no cost.
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