The Ins and Outs of your Credit Card Statement
For generations, credit card companies have preyed on the fact that the average person ignores fine print, details and anything that looks remotely complicated on their credit card statement. They can raise your rates, lower your credit limit and dish out fees like fish at Pike Place Fish Market in Seattle. But your statement is intentionally designed to confuse you. Let’s break down the sections of your credit card statement and see what we can learn.
While every credit card company puts the various sections of their credit card statement in a different order, here is a basic primer for what you can expect with your first card.
Your New Purchases – One of the things that can make this section so complicated is that people tend to get their new purchases confused with their old ones and then they also get the balance for their new purchases confused with the remaining balance from previous months. The only thing that should be listed in this section are purchases made within the last 30 days. This is also the part of your statement you want to scour to look for transactions that you didn’t make. This is the only real time you’ll have to nab someone for using your card without your knowledge.
Your Previous Balance – This is where you see the balance you are carrying on your card. Ideally, you want this number to be less and less with each statement, but we don’t live in a perfect world. A smart credit user makes sure that their balance is always dropping, if not every month, than more months than not. Otherwise, you could find yourself with a maxxed out card sooner rather than later.
Credits and Payments – This is also a very important part of your bill. Here you can make sure that all of the payments you’ve sent in, whether it was with an old fashioned hand written check or with an online debit card payment, have cleared. You can also double check to make sure any returns or any other credits to your account have been made. The important thing to remember here is that no one is looking out for your account but you. If you don’t double check the important parts of your statement, no one is going to do it for you and you could end up being taken for a ride.
Many cards have a separate section for any cash advances you’ve taken out. Of all of the parts of your credit card statement that you want to have blank, this is number one. Nothing, and I mean nothing, collects more interest than cash advances. In almost ALL cases, credit card companies have a separate interest rate for cash advances, and it is usually the maximum allowed by law (usually 23.99 percent). No matter how much you think you need a cash advance on your card, don’t do it, you’ll be paying for it for a long time.
The final part of you card that you need to pay close attention to is the section where they list your interest rate. Often times, card companies will show a rise in your rates in this area. By catching your interest rate hike early, you can start shopping around for a new, lower rate card.