Credit Card eZine - News and Articles about Credit Cards

How to Read Your Credit Card Bill

[August 30th, 2019]

When you open a credit card, the issuer starts to monthly send you billing statements in mail or make it available to view online if you sign up for paperless billing. Such bills typically not only include the amount of your purchases from the previous month but also indicate some other charges and additional information. Thus, it may be not so easy for a credit cardholder to sort all the numbers out.

However, keeping track of and understanding your payments is definitely something you should pay attention to. To become savvy in this matter, first of all, look into the main types of charges you may find listed in your credit card bill:

• Previous and New Purchase Balances

As a rule, the biggest amount on your statement is composed of purchases made in the last billing period. To this amount, there may be added unpaid balances from previous periods.

• Interest

This charge is based on the card’s APR and is levied for the unpaid balance. In some cases, you may not be charged interest at all. For example, if your card offers a 0% APR period or if you pay off your balance in full before the due date.

• Annual Fee

This kind of fee is taken for just using your credit card and its service. In most cases, as it derives from the name, it is charged once a year. Some cards waive it for the first year or come with no annual fee at all.

• Penalty Fee

This fee may occur when you fail to make your payments on time or exceed your card credit limit. The main thing to remember is that, according to the law, a late payment fee cannot be bigger than $35.

• Cash Advances

In case you have used your card to withdraw cash from an ATM during the previous months, you will see it reflected in the next statement. In addition, you will surely notice quite significant interest and fees for this action.

• Balance Transfers

If a credit card gives the opportunity of transferring balances from other credit cards to it, then such operations will also be indicated in monthly bills. Don’t forget that balance transfers usually bring additional APRs and fees that are also stated in the bills.

• Foreign Transaction Fee

Another type of fee may appear on your bill after you use your credit card abroad or transfer money in foreign currency. You are lucky if your card keeps away from it.

• The Minimum Payment

This number implies the lowest amount you can pay on your credit card in order not to be past due and not to receive late fees along with extra interest. Typically, it is counted like all interest applied plus 1% of the whole debt.

In addition to the main credit card charges listed above, your billing statements usually include the following information:

• The Payment Due Date,
• The Credit Limit and Available Credit,
• The Length (days) of the Billing Period,
• Credit Card Issuer Contact Information,
• Rewards Earned/Redeemed (if applicable).

Now when you receive your credit card bill next time, you will be able to competently study all the numbers it contains. Make sure that there are no errors and you are to pay only for what you really should. Thus, you will significantly reduce the risk of unreasonable charges and will always own the situation.