Every credit card holder gets a monthly statement by mail. This statement describes all your spendings, fees, important dates, current and outstanding balances with your credit card. Contrary to popular perception all credit card statements are not the same, they vary according to the credit card issuer. Reading this monthly statement carefully and understanding every bit of it matters a lot for the credit card holder. In this two part article we take a look at various terms and facts mentioned in a typical credit card statement and what do they really mean for the credit card holder. Let us start.
Purchases/new charges
It will contain details of what all did you purchase or borrowed with your credit card in the previous month. Check this carefully. If there is an item which you didn't purchase or amount that you didn't borrow but is listed in this section, its time to act. Dispute this faulty charge on your credit card with the credit card issuer. Keeping all the bills and receipts of your purchases handy will help you substantially when you report any false charge on your credit card. The APR's credit card company charge you on your purchase or borrowings will be mentioned in the credit card statement. It is good to scrutinize these details. If you feel that anything is charged a high or incorrect APR get the matter sorted out by contacting the credit card company.
Previous balance
It is the outstanding balance that you owe to the credit card company for the past month. It is good to match it with the credit card statement of previous month. There is nothing like a nil previous balance in your credit card statement. This indicates a good repayment record, but if it is increasing rapidly it is time to worry!
Payments and credits
This section contains the details of payments you sent to the credit card company. Make sure every thing you paid to the credit card company gets credit here. If not, ask the credit card company about the errors.
Cash advances
If you withdraw any hard cash using your credit card, it will be listed in this section. Cash advance are definitely not a good thing to take. They attract a relatively high APR and a cash advance fee. Stating simply, any cash advance is a loan at very high interest rates. There is a little or no grace period with cash advance and it will start to pinch seriously if overlooked even for a few months. If for any reason you have taken a cash advance, make sure to get rid of it as soon as possible and when you make repayments to the credit card company, clearly mention about repayment to the cash advance debt.
APR
Annual Percentage Rate(APR) is what the credit card companies will charge you on your outstanding balances. This has to be consistent. If you find it jumping suddenly, act immediately and find out what is causing this abnormality. The credit card companies are constantly looking on for errors on the part of credit card holder so that they can slap a high APR. If your increase in APR is unjustified, and the credit card company is unrelenting, it is time to switch balances.
Without any doubt what so ever, the credit card monthly statement is a very important document. The second part of this article takes a look at few more important terms that credit card companies use in their monthly statements and which any credit card holders shouldn't ignore.
