Your Credit Card company sends you a bill every month. If you don’t take much notice of it, you might be missing out. To begin with, there could be errors that could cost you money. More importantly, you can spot unauthorised access on your card through your Credit Card bill and report it to your Credit Card company.
If you want to get accurate information from your Credit Card statement, you need to read, interpret, and understand it accurately. Before delving into this, let’s first understand how Credit Cards work.
How Do Credit Cards Work?
Credit Cards allow you to borrow money from a financial institution up to a predetermined credit card limit. You can use the Credit Card to make purchases and pay for services. However, you must repay the borrowed amount in full or monthly instalments, along with any applicable interest and fees.
Structure of a Credit Card Bill
A Credit Card statement might vary from one Credit Card company to another. However, there are certain general sections that you will find in all Credit Card bills.
Here is a breakdown of the sections on your Credit Card statement to help you better comprehend it:
Account Information
This section contains the basic information of your account, including your personal details as follows:
- Name and mailing address
- Account number
- Billing cycle dates
Account Summary
This section features the transactions you have made in the past month. It features the following details:
Payment due date with a minimum of 21 days to pay your bill
Payments and credit details of purchases you have made and any payments that might have been made into your account Total balance amount
Other fees like “over the limit” fees, late fees, balance transfer fees, and so on
Purchases
In the purchases section, you will see the following details:
Date of purchase
Vendor name
Category of purchase made, typically under heads like travel, groceries, and bill payments
Amount charged
Payment Information
This section tells you how much balance you have left on your card. It includes the following details:
Total credit balance
Minimum amount due
Duration for paying off your balance
Available credit
Total fees and other charges paid during the year
Account Fine Print
This section contains a great deal of additional information, such as:
Contact details of the Credit Card company
Your cardholder rights
Explanation of how interest is calculated
Note: Read through this section carefully because additional information can be provided differently from one Credit Card company to another.
Interest Charges
In this section, you will see the details of the following:
Annual Percentage Rates (APRs)
Purchases taking the benefit of APRs
Cash advances
Information on cash advantages and how you can avail them
Balance transfers, if any
Rewards
Pay particular attention to this section because it shows you the rewards you have earned using your Credit Card. Here, you will also get information about the extra benefits you can avail when you use your Credit Card.
Rewards balance (before the current month)
Rewards earned in the current billing cycle
Rewards redeemed
The Ideal Timeframe for Holding Credit Card Bills
Usually, it is advisable to keep a Credit Card statement for the duration that it would take to raise a complaint and get a response.
Typically, 60 days is the minimum period recommended to keep a Credit Card statement.
This period tends to vary from one Credit Card company to another. A common-sense approach would be to check your Credit Card bill payment thoroughly. If it seems to be accurate, you could dispose of it once you have paid the bill unless you need to keep the record for some other purpose.
Another aspect of retaining Credit Card statements is if you need the record for Income Tax purposes. In such cases, you would have to keep your Credit Card statements for the current financial year until you have filed your Income Tax Returns.
Also Read: Is it Beneficial to Pay Loans Through Credit Cards?
Conclusion
When it comes to making financially informed decisions, it is essential to know how to read and interpret your Credit Card bills properly.
Paying special attention to your card bill is crucial to maximising your Credit Card benefits. Utilise the information provided in this article to understand your Credit Card statement fully. By doing so, you can stay updated about your expenses, track your payments, detect any errors, and take advantage of the various features and rewards your Credit Card offers.
