Understanding Credit Card Statements

It’s important to be able to read and understand your credit card statements since they deal with real money and what you will be paying back in the future. In this article, we will briefly go over the elements on your credit card statement for your better understanding

  • Total Credit Limit – The maximum debt balance your lender is allowing you to maintain on your credit card.
  • Total Credit Limit Available – How much more money you can charge to the card before you hit the limit.
  • Statement Date – Last date for credit card transactions to show up on the current statement.
  • Minimum Payment – The least amount of money you can pay on the due date without going into default.
  • Previous Balance – Amount owed on the last statement
  • Payment / Credits – Amount payed off or deducted from the account since the last statements
  • Purchases / Debits – Amount of additional debt accrued to the credit card.
  • Transaction Summary – Contains a list of the latest purchases made with the credit card and debt payments made to reduce the balance. Each item is marked with a reference number for identification purposes.
  • Average Daily Balance – Calculated by adding the credit card balance for each day since the last billing cycle together and then diving by the total number of days in the cycle period.
  • Daily Periodic Rate – The percent of interest accrued each day. This takes the yearly APR and divides it by 365, the total number of days in a year.
  • Days in Billing Cycle – Number of days between the current credit card statement and the last one.
  • Finance Charge – The amount of money added to the debt owed due to credit card interest. Calculated by multiplying the average daily balance by the daily periodic rate and the number of days in the billing cycle.
  • Annual Percentage Rate (APR) – The interest rate on your account for a given year. A portion of this interest rate is applied each month as the finance charge mentioned above instead of once a year.
  • Account Number – Unique identification number that represents the credit card account with the company. This number may be used when a representative looks up your account details in the system.
  • New Balance – Represents your current debt as of the current statement date. It’s calculated by taking the previous balance from last month and adding in any payments or credits, purchases and debits, and the new finance charge from interest.
  • Current Payment Due – The amount of money you owe to the company by the next due date.
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