5 Things to Check in Your Credit Card Statement
Credit Card statements are sent by the banks to the credit card holders at the end of every billing period to summarize the card usage during the said period. If you are a new credit card holder, you may find that a few of details seem difficult to understand but worry not. You need not be overwhelmed by the technical jargons and just understand and learn what are a few charges called and it will become a piece of cake in no time.
As a credit card user, it is very important that you understand the fine print in your credit card statement so that you are not overcharged by the bank and end up with more debt than you actually have inherited. Apart from general errors in spellings, DOB, address and transactions you should also be on the lookout for unauthorized charges, billing errors, due dates and such on the statement before you actually pay the bill.
Let’s find out what are the five main things that you should always check on your credit card statement:
Statement Due Date
Not to be confused with the payment due date. Statement due date is just the date on which your statement is generated. Interest for late payment is usually charged starting from the date the statement is generated. So, you should always be aware of the date so as to avoid late payment charges.
Payment Due Date
Your payment due date is the date by which you have to pay the due amount to the card issuer company. In case you decide to pay through cheque, remember that it usually takes 2-3 days for a cheque to clear, and this is why it is advised to avoid waiting till the last day to clear your dues.
Grace Period
There is a three-day “grace period” from the end of the payment due date for the outstanding money to be paid. Late payment penalties are only assessed if no payment is made after the grace period has expired. If dues are not paid before or during the grace period, interest will begin to accrue on the unpaid balance, which will be shown in the following billing cycle and statement. Many credit card issuers, however, include a grace period of anywhere from 20 to 25 days from the end of one billing cycle to the next due date for your payment.
Total Amount Due
As suggested by the name, it is the total amount due in a billing cycle. In addition to the transactions made in the previous billing cycle, the total amount due will also include interest applicable or any late payment charges on the previous bill, service charges, annual charges or any other transactional fee.
Minimum Amount Due
This is the minimum amount; a credit card holder needs to pay on their bill by the payment due date to avoid any late fees to be levied on them. It is calculated as the percentage of the outstanding amount or the lowest amount that needs to be paid to avoid any late payment charges.
But remember, paying just the minimum due amount will not sort your troubles. If you pay just the minimum amount due, interest will start accruing on the outstanding amount until you settle that in full. Paying minimum amount only helps you waive off late fee. So it is advisable that you don’t fall in the minimum payment debt trap and pay the total amount due on the due date to avoid late fee charges or accruing interest on unpaid amount.
Understanding the different terms in your credit card statement will not only help you understand the nitty-gritties of your credit history but also help you use and manage your credit card more efficiently. So, always be on the lookout and pay attention to the finer details in life.