How to Read a Credit Card Statement
Posted April 6th, 2009 and last modified November 17th, 2011
Know each part of your credit card statement to maintain a good standing with your bank and to help you work with a budget.
Understanding your credit card statement is imperative if you regularly spend on your credit card and need to follow a tight budget. To most reading a credit card statement is fairly straightforward, yet for newcomers there may be a couple of features that need to be clarified. The key features of your credit card statement include:
#1 – The Statement Period
Knowing this period of time is essential to take advantage of your 55 day interest free period.
A common misconception (one which banks wish more people would stay in the dark about) is that 55 days interest free applies from the date of your purchase. Another thing to take notice of is the text ‘up to 55 days interest free on purchases‘. Depending on your statement cycle, it could be up to several days less.
So when does the 55 day interest free period actually apply? What it actually applies to is the ’55 days’ from the start of your last statement period, till it’s ‘Payment due date’ (2).
From the statement below, this is a grace period of 53 days between the 27th of February – 20th of April. If you made a purchase on April 16th for example, you only effectively have 4 interest free days on your purchase.
Electronic Statement Credit Card
The St. George Vertigo offers eStatements to customers, allowing your credit card statements to be delivered via e-mail, saving paper, and making it much easier to keep a record and history of your statements.
- $55 annual fee
- 13.24% p.a. on purchases
- 0.99% p.a. for 12 months on balance transfers
- Cash Advance Rate of 21.49% p.a.
- 55 days interest free
- Minimum Income Requirement of $15,000 p.a.
#2 – Payment Due Date
This is the date you must pay at least the ‘Minimum amount due’ (3) for your current credit card statement.
If you do not pay at least the minimum repayment, your credit card rating will be affected and you will be charged a late payment fee of $10-40 (depending on your financial provider).
#3 – Minimum Amount Due
Also known as your ‘minimum repayment’, this figure is often 2-5% of your balance or $10-30, generally whichever is higher applies.
Try to avoid paying only the minimum repayment unless absolutely necessary, as it can take years to pay off balances as low as $500 (thus accumulating significant interest over that period of time).
#4 – Overdue
This is how much payment you have overdue. The longer you delay this payment, your bank may be constantly charging you late payment fees along with black marks being tallied towards your credit score.
#5 – New Charges
This is the accumulative amount of all your transactions made in your statement period to date.
#6 – Payments/Refunds
This is the accumulative amount of all your repayments made towards your credit card in your statement period to date.
#7 – Closing Balance
How much you currently owe on your credit card. If you have put more money on your card than your credit limit, this figure will be displayed as negative.
#8 – Transactions
This area lists all your transactions, including the date of purchase, transaction reference code, what was purchased and how much it cost.
#9 – Purchase / Cash Advance Rate
These are your standard annual percentage rates (APR) on purchases and cash advances.
#10 – Daily Rate
Although interest rates are given as a yearly figure, this is the real figure which applies to your transactions. This is how much interest will accumulate on your purchases/cash advances each day. You can find this figure by dividing your annual rate by 365.
#11 – Reward Points
Note: This is not present on the example statement below as the card does not offer rewards.
However, on reward program cards, you will be given a figure for how many reward points you have in total, as well as how many you’ve earnt in your most recent statement period.
Credit Report Errors
If you are about to apply for a credit card and you are afraid of getting declined, you may want to get a copy of your credit report before you fill out any applications. If you have a credit report error, it could keep you from not only getting the credit card you want but it can keep you from getting loans and more. Sometimes these errors are caused by miscommunication and sometimes they are caused by typos. That means even if you think you have spotless credit, you will want to get a copy of your report so that you can check your statement of account to see whether or not everything is correct. You could end up saving yourself tons of time and frustration.
What if There is an Error?
When you get your credit report from either Dun and Bradstreet or Veda Advantage, you will be able to see if there is a credit report error that could hold you back. If you suspect that a statement of account is incorrect, you will contact the lender and the credit reporting agency to get the matter cleaned up promptly.
Oftentimes, all it takes is pointing the error out to get things fixed. Other times, you may have to prove that the account isn’t yours or that it has been calculated incorrectly. If you suspect that you have been the victim of identity theft, you will want to contact the lender and the agency, just as you would before, but you’ll also want to contact the police to let them know what’s going on.
Again, by reading your credit card statements, you will be able to see if there are any legitimate errors in terms of your transactions. For example, maybe you accidentally paid twice for an item online because you were impatient and were clicking the buttons too often. The result is a double charge on your credit card which can often be reversed quite easily with the help of the merchant. Since there is a time limit on how long you can wait before pointing out the error, it is critical that you stay on top of your credit card statements.
Before you apply for any credit card or try to get any type of loan, you should make sure your credit is good enough to get approved after you submit your application. Even if you think that your application is spotless, you can never be too sure. That’s why you will want to contact Dun and Bradstreet or Veda Advantage and make sure a credit report error isn’t hold you back. Your statement of account should be accurate for every creditor on your report and the only way to make sure is to check it yourself. If you do see an error, report it right away so that you can get the matter fixed. Whether it’s a mistake or it’s identity theft, the sooner you work on getting your report corrected, the sooner you’ll get that credit card or loan you need.
Credit Card Statements: Unauthorised Transactions, Identity Theft, and More
Identity theft is on the rise and with it are unauthorised and fraudulent transactions. You might be surprised to learn that many people don’t realise they have been the victims of an identity theft until quite a bit of time has passed, in some cases even more than a year. How can that be, you ask? Well, it’s quite simple, it’s because people don’t read their credit card statements.
If you don’t take the time to study your credit card statements, there really isn’t any way for you to see whether or not there is any unauthorised activity taking place within your account. This is why going through each transaction is critical. Otherwise, if you don’t bother to read your credit card statements, it’s basically like giving identity thieves carte blanche to do whatever they want with your credit card.
If you see any unauthorised charges to your account, you can inform the card issuer. They can freeze the card, which is especially useful if the unauthorised activity is a result of having your credit card stolen.
No Surprises!
Another good reason to pay special attention to your credit card statements is that you won’t have to worry about any surprises such as unexplained fees or changes to your account. One example is if you were charge a late fee because the payment didn’t go through properly. This isn’t your fault and basically, you shouldn’t have been charged the fee in the first place so you can get in touch with the card provider and have it corrected.
It is also a good idea to read your credit card statements regularly because they will also inform you of when introductory rates expire and other similar important information. Therefore, you won’t have any big surprises when your rate reverts to the bank’s standard purchase rate. If you know exactly when the introductory rates expire, you will be able to take action to clear outstanding debt and balance transfers as soon as possible so that you won’t have to pay the higher interest rate.
Although we all know that anything purchased on a credit card has to be paid for at some point, it is very easy to get carried away so that when the monthly statement arrives, we get a nasty shock. This is especially the case if times are financially stretched – as they are for so many people at the moment – when it is necessary to put certain bills on a credit card that we would normally pay for with cash.
There are three ways:
1. Attend to any financial matters in the morning:
The earlier in the morning you do this, the more hours you will have later on when you can relax and not think about finances. When we read a book late at night, we will often then go to bed and dream about something related to the story. In the same way, trying to handle financial matters in the evening will produce stress at the exact time that you are trying to relax, and these worries may follow you into sleep, disturbing your night. When this pattern is repeated, we quickly fall into a vicious circle, whereby we become more tired and more irritable, and less able to deal with our financial worries.
2. Speak to someone close:
Sometimes, just the act of talking about something makes it less troubling. Even if the other person cannot really help, just by letting it out of your system for a while you may feel a little lighter. The worst thing is to keep these financial matters from your spouse or partner. Not only may they have some constructive ideas to help reduce your credit card bills, but it will keep the relationship in a healthier state. Keeping problems to yourself will only produce barriers in a relationship. You will be stressed, the other person may not know why, and they may take it personally. Pretty soon, they’ve retreated behind their own wall and neither of you are talking to each other. If you have a credit card bill and you are concerned about paying it off, talk to your partner. They may be relieved to know it’s not them at fault!
3. Speak to your credit card provider:
This may seem like a really bad idea if you are worried about a debt you owe them, but rest assured they have heard it countless times before. Lenders always run the risk that a borrower may fall behind; they understand your situation and they will want to help you resolve it. Which do you think they would rather see happen? You keep quiet and end up becoming a bankrupt so they get nothing back? Or you speak to them and they work out a way to recover the credit card debt at a slower pace? Someone will be available to speak to you who is perfectly able to negotiate a mutually beneficial solution. And bear in mind that situations can be highly fluid. Although you may feel that settling your credit card bill is beyond your reach, that situation can always change. Credit card companies know this and are happy to bide their time until you are in a better position. You could also consider transferring your balance to a new credit card provider – one that offers a lower introductory rate of interest, or even a zero rate for several months. This could be enough to alleviate the immediate stress so you can work on a better plan to repay credit card debt.
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The 55 days interest free period only applies if your balance is at $0 when you make the purchase.
Eg- $0 balance then you spend $500 on a sofa- you then get UP TO the 55 days interest free period on the $500.
If you already owe something, eg $50 and then you spend $500 on the sofa, you don’t get the $500 interest free period, the total $550 will be accumulating interest at the interest rate from the date of purchase.
So you will only get the UP TO 55 days interest free if balance at $0 when making the purchase.