Credit Card

How to Read Credit Card Statement

In today’s generation, every one keeps a Credit Card and in fact some have multiple cards. Its becoming an essential part of our life. There are lot of good and bad things about the credit card which i have discussed previously in one of my posts, which one can read here.

I come across many people who face lot of problems while reading their credit card statement. In fact many people ignore the statement completely and rely on the message sent by the bank; but that credit card statement is meant for our due consideration and therefore Bank sends that statement to us via e-mail or courier.

In today’s article I will explain how one can read the credit card statement and what points he should keep in mind while reading the same:

a.) Personal Information: First of all we should check our personal information in credit card statement like name, e-mail id, address, phone number. We should also check our credit card number which is very essential.

b.) Information Related to Credit: Two kind of credit related information are mentioned in credit card statement i.e., Credit Limit & Available Credit Limit. Credit Limit represents the maximum the bank is allowing you to borrow and available credit limit represents how much more you can spend. So, basically the correlation which exists between this two is –

Available Credit Limit = Credit Limit – Amount of money you already spent

c.) Advance Credit Limit: This is the sub-limit in the credit limit. This is the amount of money which you can withdraw form the ATM by using your credit card. However I would recommend you to never use this facility of credit card. One can use it in extreme situation only because the this facility comes with high charges like one time steep charge which normally range in between 2.5% to 3%. The interest also accrues on the same immediately.

d.) Some Important Dates: There are two important dates which we should look carefully i.e., Statement Date and Due Date. Statement Date is the date on which the credit card statement is generated and Due date is the final date when your bank must have received the due amount. Due date is very important, you should pay the money in such a manner that your bank is paid by due date.

e.) Due Amount: This is also an important point to keep an eye on. There are two kind of amount that are mentioned in the statement i.e., Minimum Amount Due and Total Amount Due. Total Amount Due is the amount which is due to the bank and Minimum Amount Due is calculated by bank keeping in view the Total Amount Due and they expect you to pay at least this amount before due date. If you pay the minimum amount due then you are opting to pay very high interest rate – 35% to 40% per year. This will also decrease your CIBIL Score which impact your future loans, interest rates, credit card approval etc. So, please always try to pay total amount due, which will keep your financial life healthy in longer run.

f.) Transactions: In the credit card statement, all of our transaction for the statement periods are mentioned. You should check all the entries carefully and if you come across any discrepancy you must immediately inform the bank.

I hope after reading the above points, now you can understand your credit card statement and can act intelligently. In case of any discrepancy you always need to inform your bank so they can check the same.

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Happy Investing!!

Vikas Agarwal
the authorVikas Agarwal
Vikas Agarwal is an IIT-Varanasi graduate in Chemical Engineering. He is the Founder and CEO of Finaacle.com - an investment advisory website. He is a Business Development Professional but a Value Investor at heart. He writes articles on Finaacle, which focus on simplifying the art of investing and the causes of human misjudgment when it comes to investing. He also shares his experiences as an investor and lessons from some of the greatest investors of all time.

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