Thanks to the newly minted Credit Card Act, credit card providers are now required to provide more information on your monthly statements. These changes are designed to help consumers avoid credit problems, which can often lead to bankruptcy.
Most importantly, credit card statements must now tell consumers how long it will take them to pay off their balance and how much interest they will accrue if they pay only the minimum amount every month.
Of course, this new information may also serve to complicate an already complex document.
To help you sort out the multiple elements of a credit card statement, the blog Five Cent Nickel recently provided a helpful graphic. Some key parts of a typical credit card statement are listed below.
1. Summary of Account Activity: If your credit card statement is a meal, this is the entrée. This part of your statement summarizes all your recent credit card transactions. It also includes your billing timeframe, your total balance, and the amount of available credit.
2. Payment Information: This also provides your total balance, and shows you the minimum amount you must pay that month, and when you must pay it. Savvy cardholders pay off their entire balance each month to avoid paying interest.
3. Late and Minimum Payment Warnings: These are designed to show you the negative consequences of making minimum or late payments. Read these carefully—they are there for your benefit!
4. Notice of Changes to Your Interest Rates: Credit card companies must give you at least 45 days notice before they raise your interest rates. If you receive a notice of a change, you may be able to close your account or pay off your debt before the new rate kicks in.
5. Important Changes to Your Account Terms: Make sure to read this section in every statement. This section will list any important changes related to your credit card account, including fees and payment dates.
6. Transactions: This is a detailed list of all your credit card transactions. Check this carefully on a monthly basis to ensure that there are no errors, no overcharges, and no unauthorized uses of your card.
7. Fees and Interest Charges: By law, credit card providers must list these charges separately on your bill.
8. Year-to-date Totals: Here you will find the total amount of fees and charges you’ve had to pay that calendar year. By paying your total balance every month, you have to worry about this section. If you do carry a balance, this section will outline the true cost.
9. Interest Charge Calculation: This provides a summary of the interest on various types of transactions.
Those are the most important features of your credit card statement in a nutshell. Remember that none of this information is terribly complicated. By splitting the statement up into small sections, and reading each one carefully, you can stay on top of your credit account, and help avoid bankruptcy.