Reading a Credit Card Statement

Credit Card

A small plastic card issued by a bank or business, allowing the holder to purchase goods or services on credit

Credit Card Statement

Monthly statement listing the purchases, payments and other debits and credits made to your credit card account within the billing cycle.

Billing Cycle

The period of time between billings, usually about 30 days

During the billing cycle, purchases, credits, fees, and finance charges are posted to your account. At the end of the billing cycle, you are billed for all unpaid charges and fees made during the billing cycle. Your credit card payment is due 20-25 days after your billing cycle ends

Grace Period

The period of time between your billing cycle end date and your bill due date

Account Number

The primary identifier of ownership of an account

All credit cards have their own account number

Total Credit Limit

Credit limit also refers to the maximum amount a credit card company will allow someone to borrow on a single card

Credit limits are usually determined based on information contained in the application of the person seeking credit, or that person's credit rating.

Total Available Credit

The amount of unused credit

Example: If your Total credit limit is $500, and you have used $150,

then your total Available Credit is $350

Statement Date

The date on which a statement (bill) is generated, and the month's finance charges (interest) are added to the balance.

The statement date is usually the same date every month

Minimum Payment

The minimum payment is the lowest amount of money that you are required to pay on your credit card statement each month

The industry standard is now to calculate the minimum in one of two ways: either 3%-5% of the total balance due, or, all fees and interest due that month, plus 1 percent of the principal amount owed.

Example Minimum Payment

You owe $500

Interest is $13

1% of $500 is $5

Total Minimum payment is $18

Payment Due Date

The date on which your payment is due

Most credit cards do not have a payment grace period

If you are even one day late, you will be charge a late fee

Late Fee

A fee charged for not paying on time

Current Payment Due

Date for the current month’s billing that a payment is due

Balance Summary

A summary of your payments, purchases, and previous balance during the billing cycle

Previous Balance

The amount you owed at the end of the previous billing cycle

Payments/Credits

Any payments made or credit received during the billing cycle

Refunds are an example of credits received

A credit is money that is given back to you

Purchases/Debits

Purchases-anything you have bought against your credit

Debit-the recording of an entry of debt; an amount taken out of your account

Finance Charge

A fee for the cost of credit, expressed as a dollar amount

New Balance

The amount owed on a credit card at the end of the billing cycle

Transaction Summary

A list of all transactions made on your account

Include anything you have purchased, payments you made, any credits (refunds) received

Summary will include the date of the transaction, the day it was posted to your account, a description of the transaction and the amount of the transaction

Interest Charge Calculation

A summary of the method used to calculate the finance charges on your credit card account

Days in Billing Cycle

The number of days from the start and end of a billing cycle

Finance Charge/Cash Advance/Transaction Fees

Total amount of fees charged to you

Annual Percentage Rate

The interest rate charged annually for the use of credit, expressed as a percentage

Amount Enclosed

The amount of money you are paying towards your credit card bill