Analyzing Your Credit Card Statement

A lot of people will receive their credit card statements and they are not sure what is going on. They don't know how to read them. Your credit card statement will provide a wealth of information and if you know and understand all of the individual categories you will be able to interpret your statement a lot easier.

Current Balance

Your statement will have a section that says current balance or new balance. This amount represents what you owed on the closing date or the date that your statement was formulated. Any fees or finance and interest charges that you have accumulated thus far will be included in your new balance.

Total credit limit

Your credit limit or your credit line represents the amount of credit you have access to. Never go over your credit limit because you could be charged an over the limit fee. This fee can vary from credit card company to company and it can be as much as $35.

Previous balance

Your previous balance will be the balance you had on your credit card account when your previous statement was generated.

Minimum payment due

If you compare credit card companies methods for calculating the minimum payment due you will find that practically all companies have their own way to arrive at this figure. Some will use a straight 4% of the outstanding balance. Others will take 2% of the balance plus any fees, interest and late charges. If you want to find out how your credit card company calculates this figure it will probably be outlined in the terms and agreements of the statement.

Available credit

Your available credit is the amount that you can charge and it's the amount that was available when you statement was generated. This figure is derived by taking your total credit limit and subtracting your new balance from it.

Payment due date

Your payment due date is very important. You always want to make sure your payment is received by the due date otherwise you could incur a late fee or charge which can vary from company to company. This fee can be as much as $35 to $39. Make sure you allow for mailing time. Some companies have shortened the amount of time you actually have to get your payment in. If you are accustomed to paying your balance in full then your payment should be received by the due date to make sure you do not receive finance charges.

Cash Advance limit

You actually have two limits on your credit card company; a credit limit for purchases and a cash advance limit. Your cash advance limit is the amount of a cash advance that you can receive from an ATM or visiting your local branch. If you go to an ATM you will need to know what your personal identification number, (pin). There will be fees for a cash advance and you will be subject to a very high rate of interest of you get a cash advance whether it be from an ATM or a bank teller.

The closing date

This the billing date or the date the statement was generated. The next day after the closing date the statement is mailed out. Any charges after this date will appear on the next statement. Sometimes a payment is mailed to the credit card company but it's not received before the statement is received and many customers will wonder why the statement does not reflect the payment they mailed in.

Finance Charges

The finance charges are the amount you are charged based on your balance. The amount of finance charges will depend on your interest rate, your balance and the method the credit card company uses to compute finance charges. Most companies use the average daily balance method, which unfortunately charges consumers more in finance charges than the other methods in use.

Credit

Credits are items that are subtracted from the outstanding balance such as payments made, items returned to a retail outlet, or any types of disputes. Basically any subtractions will show up in the credit section.

Charges

Charges can be any purchases that were made as well as cash advances. Make sure all of the purchases or charges are yours. You want to make sure no one has made fraudulent charges by accessing your personal information.