How To Read Your Credit Card Statement

The account summary provides an overview of your account’s current status and your total balance. This includes:

• Your payments
• Any credits that have been made to your account
• Your purchases, balance transfers, and cash advances from the statement period
• Fees and interest charges
• Any past-due amounts

This section will also show your new balance, available credit, and the last day of the billing period.

Your credit card statement’s payment information section shows the payment you must make to avoid late payment penalties. This section includes:

• Your statement balance, or the amount you owe at the end of the billing cycle.
• The minimum payment required to avoid late fees or annual percentage rate (APR) increases.
• A late payment warning disclosure that explains what will happen if you pay your bill past the due date. If you have been late on a previous payment, the payment information section will include a past due amount.
• A minimum payment warning that explains how long it would take you to pay off your current balance if you made only the minimum payment and how much interest you would pay. Credit issuers are required to provide this information so you can see where you stand in paying off your balance.¹

Failure to pay the minimum payment by the due date can result in a late fee – and after your account is 30 days delinquent, your credit card issuer can report your account to the three major credit bureaus (Equifax, Experian, and TransUnion). If you still don’t pay, you may be charged a penalty interest rate.²

Setting up automatic payments helps you avoid missing the due date and incurring late fees or interest charges. If you miss a credit card payment, plan to submit at least the minimum amount as soon as possible.

The transaction section will list all charges and payments in the order of the date they occurred, including:

• Purchases
• Payments
• Credits
• Cash advances
• Balance transfers

Some credit card companies group these by type of transaction, while others list them by date of transaction or by user (if applicable). Pay close attention to this section and verify that the transactions and amounts are accurate. Report any fraudulent activity or unauthorized charges to your creditor immediately.

This section details how much interest and fees you have been charged during the current billing cycle and year-to-date. It’ll be broken down into the three different types of balances (purchases, cash advances, and balance transfers). Depending on your credit card issuer, the interest rates may be the same across all categories or vary by category.

If you have a promotional or introductory APR, it will be listed in this section, along with its expiration date. This helps you plan to pay off your balance before the regular APR kicks in and increases your interest charges.

You can reduce the amount of interest you’re paying by either negotiating a lower interest rate or by paying your balance faster. Keep in mind that some fees (like an annual fee) are unavoidable. However, other fees, like late fees and cash advance fees, are easier to avoid.

If you have a rewards credit card, your summary will include an overview of points earned during the statement period, as well as the total rewards amount available to you. Credit card rewards typically fall into three categories:

• Cash back credit cards give you a percentage back on purchases that you can redeem for cash or statement credits.
• Points credit cards give you points for your purchases that you can redeem for gift cards, cash back, hotel stays, flights, and more.
• Miles credit cards give you points that you can redeem for travel, as well as benefits like access to airport lounges.

Understanding how your credit card’s rewards program works can help when planning an upcoming vacation or seeking to earn free cash.

This section explains how interest is calculated for your credit card account. It may include the following information:

• The APR for each type of transaction
• The balance that is subject to interest charges
• The method your creditor uses to calculate interest
• The date your APR will change (if applicable)

You don’t need to check this section every time you review your statement, but it’s smart to review it every so often to ensure that you understand how you’re being charged interest.

Any changes to your account, like an annual fee or increased interest rate, will appear in a special section on the front of your billing statement. This section is required by law.³

Your credit card statement may come with a payment coupon that you can include with your credit card payment. If you’re mailing your payment, detach the coupon and place it in the envelope with your credit card payment.

However, using automated or electronic payments is the best way to keep your payments consistent and avoid the consequences of not paying your credit card bill.

Stay on top of your finances

Reading and understanding your credit card statement helps you notice trends in your spending, understand how your interest is calculated, and avoid paying unnecessary fees and charges. Regularly checking credit card statements will make you a savvy cardholder.

Understanding your credit card statement is only one piece of the puzzle. Learning how credit cards work can help you use them smartly and avoid racking up debt.