Once a month, your credit card statement arrives. You may be one of the few who diligently reads over your statement each month, but odds are it gets neglected or just thrown away.
You may find it scary or unnecessary to look because you because you track your spending online and have auto payments set up. But no matter how well-versed you are—or aren’t—in your personal finances, it’s important to read your credit card statement in full.
This article will guide you through everything that’s in your statement and why it’s important.
Parts of a Credit Card Statement
Here’s an overview of the different sections of your credit card statement, including the annual percentage rate (APR), charge activity, balance transfer fees, reward updates, and credit card payment info.
This section will have information regarding your account, including your new balance, available credit, and the last day of your billing period.
This can either be the full account number or just the last four digits. If you need to contact your card issuer, they can look up your full number if you verify other cardholder details.
Your credit card statement will normally include your balance from the last billing cycle for your reference.
Past Due Amount:
If your account is past due, this amount will be clearly displayed and you will be advised of the total amount that must be made to bring your account current.
Payments and Other Credits:
This is the amount you paid last month toward your previous balance. If your previous bill was paid in full, the total should be the same as your previous balance. Any credits may be from purchase refunds or fee reversals.
This is the sum of all charges made to your credit card during the current billing period.
This is the total dollar amount of any balances that you moved to this credit card from other credit card account(s) during the current billing cycle. This section may also display the expiration date of any introductory balance transfer offer.
This is the total amount of money that you got in cash advances over the billing cycle. You should avoid taking a cash advance on your credit card since the APR is much higher than regular purchases. (This method should only be used as a last resort if all other cash retrieval methods are exhausted. However, you may be able to take advantage of an introductory promotional offer.)
This is the total of all fees incurred during the current billing period. It may include fees for late payments, balance transfers, foreign transactions, and cash advances.
If there is an outstanding balance from the previous billing cycle, this will show how much interest has accrued. On some statements, you will see the total interest accrued and paid year-to-date.
Many credit card companies will offer their customers free credit report monitoring through FICO, Vantage, or other similar services. You’ll get monthly updates to your credit score number and any increases or decreases. If this service is offered, the creditor may share your credit score on monthly statements.
This is the current amount you owe to the financial institution. It is calculated from your past billing cycle balance and new purchases made during the current billing cycle, plus any applicable interest and fees.
Total Credit Limit:
This is the maximum amount you can charge to your card. Try not to max out your total credit limit as it will lower your credit score. Your credit limit can be lowered or raised at any time (based on your credit agreement). If your limit changes from one billing period to the next, you will be advised on your statement.
This represents your credit limit minus your outstanding balance. It indicates how much more can be charged to the card in the future. You should make it a goal to use 30% or less of your available credit. As you use up more of your available credit, your credit score could be negatively impacted.
This section shows the current total amount you owe, the payment due date, and the minimum payment owed (to avoid late charges or reports of delinquency to the credit bureaus). For those who scan and then toss out their statement, this is commonly the only section they look over.
This is the current amount you owe to the card issuer. It is calculated from your past billing cycle balance and new purchases made during the current billing cycle, plus any applicable interest and fees.
This is the minimum amount required to be paid to the credit card bill by the due date to avoid late payment fees.
Payment Due Date:
This is the date by which you must pay your credit card issuer to avoid incurring late fees. There may be a grace period if your payment arrives late by just a couple of days. Payments, late or on time, are reported to the three major credit bureaus. A late payment can incur a black mark on your credit report. Typically, a late payment will not be reported unless it’s late by at least 30 days.
Late Payment Warning:
The late payment warning specifies the maximum amount you may be required to pay if your credit card account is not paid on time by the due date.
Minimum Payment Warning:
The minimum payment warning tells you how long it will take you to pay the current balance in full if you make only monthly payments – if no additional charges were made. This figure factors in any annual fees and your interest rate. This warning can also include a table to illustrate how long repayments may take. In many instances, it could take months or several years.
If you earn cash back, points, or other rewards with your credit card, a summary of those benefits will be included on your monthly credit card statement.
This section of your credit card statement details all the transactions you made during the current billing cycle, including the transaction date, the name of the merchant, and the transaction amount. You should go through the list of all the purchases carefully to make sure you are familiar with each of the transactions on it. In this part of your statement, you will be able to check for any unauthorized charges or other suspicious activity.
This section explains interest charge calculation in greater detail. If the APR varies—for purchases, balance transfers, or cash advances—there may be a separate section for each. If your account has a promotional APR, you will also find information about it in this section of your statement.
Fees and Total Interest to Date:
Your credit card statement may include a concise table that summarizes the interest and fees you have paid so far this year. This can serve as motivation to pay off your current balance sooner. You can avoid certain fees, such as over-the-limit fees, by limiting the amount you charge and by making timely payments to avoid late payment fees.
Your credit card statement may include an important information section to brief you on any updates or changes that were made during the billing period. This can include any changes you directly requested, such as auto-pay, a credit limit increase, or a change in payment due date.
When do credit card statements come out?
You’ll typically receive your credit card statement 21 days before payment is due. This will give you ample time to mail in your payment (with or without the enclosed payment coupon) or make an electronic payment.
Typically, your monthly credit card statement becomes available at the end of your billing cycle. (A billing cycle is commonly 28 to 31 days long. During the billing cycle, your credit card transactions are recorded and compiled into a monthly statement.)
You may be able to access your statement a few days earlier than snail mail by using mobile or online banking.
What are paperless statements?
Credit card issuers are encouraging consumers to receive their statements electronically as paperless statements. These digital versions reduce waste and save credit card companies billions of dollars in postage and paper fees.
Most banking and financial institutes allow you to retrieve and review your electronic statements for up to the past 18 months.
If you do switch to paperless credit card statements, make sure that:
- You can access previous statements digitally — at least 3 prior periods.
- You set reminders or calendar alerts for your due date so you aren’t late on your bill. Setting auto-payments for the minimum or total balance can help you avoid late charges.
- You claim any incentives offered for going paperless. If you’re asked to go paperless, you can ask for a reward like extra perks or points. While creditors claim they want to help you go green, this is cynically true.
How do you view your credit card statement online?
You can view and download your credit card statement online through the website or mobile app.
Once logged in, you can navigate to your statement information and view it online or download it. You can also request that it be sent to you via email.
How long should you keep your credit card statement?
Keep your credit card statements for at least 60 days. If your statements contain tax or business expenses, then you will want to keep them for 6 years in the event your return gets audited by the IRS.
While many financial experts suggest 3 years may be an adequate window to keep statements for tax purposes (the IRS rarely audits for tax returns past 3 years), Capital One recommends you keep these statements for at least 6 years.
If you don’t need your statement for tax purposes, then 60 days should suffice. Most credit card companies grant you at least 60 days to report any errors or fraudulent activity.
What is the best way to dispose of credit card statements?
It is risky to toss your statements in the trash or the recycling. To prevent identity theft, it’s best to shred all paper statements — even if the information is dated or the account is closed.
It’s cheap to acquire a paper shredder on Amazon or an office supply store, or you can use shredding services at Staples, Office Depot, or UPS.
Additionally, you can shred paper documents for free at USPS locations and at many local libraries.
Electronic Statements (eStatements)
You can delete any downloaded statements from your computer’s hard drive (your desktop). Or if they are backed up to the cloud or an online storage system, make sure to maintain safe password practices.
No matter what you think is—or isn’t—on your monthly credit card statement, it’s important to understand what’s on it.
And minimum balances and due dates aside, understanding your credit card statement is an important part of financial literacy. Even if you don’t aspire to become a CPA or financial analyst, understanding your personal finances a bit better is always a smart money move.