7 Things That You Must Check In Your Credit Card Statement. What Are They?
Credit card statement: Remember, if you miss a payment, you will be charged a late payment penalty and high interest charges on the outstanding balance
Your credit card statement is an important document that holds information pertaining to the use of your credit limit. It comprises records of all transactions you’ve carried out using your credit card during your billing cycle, which can crucial in understanding your spending habits. But, it’s not just that. Your credit card statement provides information on many more aspects of your credit card and how you use it. Let's find out what these are and why you must check them.
Billing and Due Date
The first two things you should check on your statement are the billing date and the due date. The billing date signals the end of the billing cycle, which is usually 30 days. The due date is the last date or the interest-free period provided to the cardholder to make the payment on the outstanding balance. The due date is the latest date by which you must make at least a minimum payment towards your credit card dues.
Plan your finances around your credit card’s billing cycle and due date to manage payments. Remember, if you miss a payment, you will be charged a late payment penalty and high interest charges on the outstanding balance. Missing payments will also affect your credit score. To avoid this, set reminders for bill payments or use the auto-debit feature to pay bills on time.
Amount Due
The amount due is the total outstanding amount you have accrued on your credit card during a certain billing cycle, including past dues, if any, which must be paid before or on the payment due date. The amount due typically comprises details of purchases, past balance, cash advances and any fee or interest charges levied. Always check your amount due to ensure you are not exceeding your given credit limit, for that can damage your credit score.
Most banks offer a repayment period of 10-15 days for credit card bills. So, if you bill is generated on the first of each month, you technically get up to 45 days to pay for transactions that are incurred in the following bill cycle.
Minimum Amount Due
This the minimum amount that you can pay towards your outstanding credit card bill by the due payment date. Paying the minimum amount due (MAD) can help keep your credit card active but interest charges will accrue on the outstanding balance. Since credit card interest rates tend to be on the higher side, it is wiser to pay your bill in full every month.
Interest Rates and Finance Charges
The interest rate is the cost of borrowing on your credit card and is usually expressed as an annual percentage rate (APR). Finance charges are the interest fees applied when you haven’t paid your outstanding balance in full by the due date. If these charges are applicable to you during your billing cycle, they will be mentioned on your card statement. Some credit cards offer an interest-free period on new purchases if you pay the entire balance by the due date. So, it can be helpful to know these details to avoid unnecessary interest payments.
Other Fees
Your credit card statement will also list various other fees and charges, such as annual fees, late payment fees, cash advance fees, and over-limit fees, that might be applicable to you, based on your usage. Review these charges carefully to understand the cost of using your credit card. If you notice any unfamiliar or erroneous charges, contact your credit card issuer immediately.
Transaction Records
The most crucial part of the bill statement are the transaction details for a particular billing cycle. This includes the date, description, and amount of each transaction. Check your transaction details carefully for it can help you spot unauthorised or fraudulent transactions. Credit card fraud is on the rise and monitoring your statement is one effective way to flag and rectify errors in your bill statement, in time.
Reward Points
Many credit cards offer reward points, cashback, discounts and an array of other benefits to cardholders. The points you accumulate over time with usage will usually be mentioned in your credit card statement along with their expiry date. Some cards also offer special discounts or deals with partner merchants, which may also be listed in your statement. Check these details carefully to redeem your rewards and discounts on time to optimise your credit card's benefits.
The writer is an AGM, Communications at BankBazaar.com. This article has been published as part of a special arrangement with BankBazaar.
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