Understand Your Credit Card Statement

A credit card statement is a summary of how you've used your credit card for a billing period. If you’ve ever looked at credit card statements, you know how difficult they can be to read. Credit card statements are filled with terms, numbers, and percentages that play a role in the calculation of your total credit card balance.

To be a responsible credit card user, it’s important to read all the fine print and understand the numbers and terms on the statement. If you don’t, you may end up with more credit card debt than you can handle.

It’s also important to read your credit card statement carefully to spot any unauthorized charges or billing errors. Your liability for those charged may be limited if you report them in a timely manner.

Below are examples of information that generally appears on a credit card statement.

Credit Card Statement

Use this interactive credit card statement to familiarize yourself with the terms commonly included on a real statement. Move your cursor over the statement to view an explanation of each term.

1. Summary of account activity

A summary of the transactions on your account—your payments, credits, purchases, balance transfers, cash advances, fees, interest charges, and amounts past due. It will also show your new balance, available credit (your credit limit minus the amount you owe), and the last day of the billing period (payments or charges after this day will show up on your next bill).

2. Payment information

Your total new balance, the minimum payment amount (the least amount you should pay), and the date your payment is due. A payment generally is considered on time if received by 5 p.m. on the day it is due. If mailed payments are not accepted on a due date (for example, if the due date is on a weekend or holiday), the payment is considered on time if it arrives by 5. p.m. on the next business day.

Example: if your bill is due on July 4th and the credit card company does not receive mail that day, your payment will be on time if it arrives by mail by 5 p.m. on July 5th.

3. Late payment warning

This section states any additional fees and the higher interest rate that may be charged if your payment is late.

4. Minimum payment warning

An estimate of how long it can take to pay off your credit card balance if you make only the minimum payment each month, and an estimate of how much you likely will pay, including interest, in order to pay off your bill in three years (assuming you have no additional charges). For other estimates of payments and timeframes, see the Credit Card Repayment Calculator.

5. Notice of changes to your interest rates

If you trigger the penalty rate (for example, by going over your credit limit or paying your bill late), your credit card company may notify you that your rates will be increasing. The credit card company must tell you at least 45 days before your rates change.

6. Other changes to your account terms

If your credit card company is going to raise interest rates or fees or make other significant changes to your account, it must notify you at least 45 days before the changes take effect.

7. Transactions

A list of all the transactions that have occurred since your last statement (purchases, payments, credits, cash advances, and balance transfers). Some credit card companies group them by type of transactions. Others list them by date of transaction or by user, if there are different users on the account. Review the list carefully to make sure that you recognize all of the transactions. This is the section of your statement where you can check for unauthorized transactions or other problems.

8. Fees and interest charges

Credit card companies must list the fees and interest charges separately on your monthly bill. Interest charges must be listed by type of transaction (for example, you may be charged a different interest rate for purchases than for cash advances).

9. Year-to-date totals

The total that you have paid in fees and interest charges for the current year. You can avoid some fees, such as over-the-limit fees, by managing how much you charge, and by paying on time to avoid late payment fees.

10. Interest charge calculation

A summary of the interest rates on the different types of transactions, account balances, the amount of each, and the interest charged for each type of transaction.

The Schumer Box

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How to Read the Schumer Box  


How to Read the Schumer Box

What is a Schumer Box? It's a cheat sheet for your credit card, an at-a-glance reference for fees, interest rates and other key points. But when it comes to personal finance, you sometimes need a cheat sheet on reading cheat sheets. NerdWallet did the homework for you: here's our guide to reading and understanding the inscrutable Schumer Box.

(Chart of Interest Rates and Interest Charges) This is the Schumer Box.

Annual Percentage Rate (APR) for Purchases (percentage) - The interest you'll pay on your debt. The better your credit, the lower your APR. (Reference to "This APR will vary with the market") This is a Variable APR. Your interest rate may change based on a national standard.

APR for Cash Advances (percentage) - Getting cash from a bank or ATM costs a lot. You usually pay a highter interset rate for cash advances.

Penalty APR and When it Applies (percentage) - Miss a payment, pay higher interest. Your interest rate could be more than double for 6+ months.

Paying Interest - Purchases get a grace period. You have at least 25 days to pay off your debt. (Reference to "We will begin chargin interest cash advances on the transaction date") ... But cash advances don't. You start accruing interest the day you get the advance.

Annual Fee (dollar amount) - You can't get out of the annual fee. But most student cards don't have one.

Transaction Feeds (percentage) - If you move your old credit cards' debt... you usually pay 3-5% of the transfer. Another reason to avoid debt in the first place. (Reference to "Either $10 or 3% of the amount of each cash advances, whichever is greater") Cash advances cost more than interest. You pay a fee, usually 4% of the advance, in addition to the higher APR.

Penalty Fees (dolar amount) - Don't miss payments! The late fee is separate from the penalty APR; you'll pay both if you miss a payment. (Reference to "Over-the-credit-limit": None) Your credit limit isn't set in stone. The issuer may decide to let you go over, but you'll pay for the privilege. (Reference to "Returned Payment": Up to $35) If you write a bad check... You'll pay this fee, plus your checking account's bounced check fees.

Via: NerdWallet