Typically, banks send credit card statements to the customers at the end of each billing period. Your credit card statement shall provide a detailed summary of your transactions and card usage. This includes the credit balance, purchases, payments, reward points, and so on. A lot of credit card users simply take a look at the total or minimum amount that is due and skip the rest of the statement. However, this is usually not the right approach. It can be pretty useful for you to pay keen attention to each detail underlined in the statement.
Going through credit card statements carefully can be helpful in identifying doubtful or unclear transactions. A lot of people forget to keep track of their credit card transactions and hence keep piling on debt. Properly reading the statements can help them to gain a good understanding of their credit card cash withdrawal and debt. This shall subsequently encourage them to manage their finances more proactively. These statements can help keep a check on credit scores as well.
If you find your debt getting too high, you might try to limit your credit, thereby avoiding lowering the credit score. No matter whether you have been using credit cards for years or are a new user, your credit card statement can be extremely helpful for you. It can keep you at the top of your borrowings and get the most out of your reward points.
Important components of credit card statement
- Statement due date:
The date on which your summary is generated and must not be confused with the payment due date. The interest for a late payment normally is charged from the date the statement is generated.
- Payment due date:
This is essentially the date by which the outstanding sum needs to be credited to the relevant credit card company. In case you are settling the sum through a cheque, it is imperative to note that it will take 2-3 days to get cleared. Hence, to avoid any penalties, it is vital to avoid postponing payments till the due date comes close.
- Total amount due:
Any late payment charges and applicable interest sum will also come under this, alongside the amount spent the previous month. Right from your credit card cash withdrawal to service charges and transaction fees, the amount due will include all of these expenses. In addition, the annual fee for your credit card shall also come under it.
- Grace period:
Credit card users are given a certain ‘grace period’ from the end of the payment due date for making payment for the outstanding sum. Late penalties are only imposed if you do not make the payment even within the grace period. As the grace period gets over, interest shall start accruing on the amount sum. This will ultimately be reflected in your following statement and billing cycle.
- Reward Points:
Many people prefer using credit cards for the purpose of gaining advantageous reward points. Whenever you make any purchases with your card, you shall receive reward points as perks from the credit card company. In the end, these points can be converted into cash to buy things.
- Credit card cash withdrawal:
The statement shall feature credit card cash advance details. This is a facility that permits you to use your credit card to withdraw money from the ATM. These cards have a certain cash withdrawal limit. The amount withdrawn by you has to be paid with the annual bill, alongside other charges and interest.
- Credit Limit Availability:
Your credit card limits shall depend on multiple factors. If you are utilizing credit cards for the first time, there is a good chance that your limit will be towards the lower side. On the other hand, if you are a veteran card user and have a good credit score, your limit might be pretty high. This limit shall be determined by your relevant credit card company. You cannot spend beyond that limit. However, certain companies allow their customers to go beyond the limit, subject to terms and conditions.
- Transaction Details:
These details must be thoroughly checked whenever you receive your statement to make sure that there are no errors. Your statement shall feature all the transactions made through the credit card from the start of the cycle till the payment due date.
Understanding the various components of your credit card statement can aid you in using your card more efficiently.