Understanding Your Credit Card Statement
You pop open your credit card bill and it looks like something out of an accountant's dream. What are all those numbers, dates, and decimal points? Do you really need to read the whole thing?
Your credit card statement contains a bunch of information that's pretty handy:
Paid your bill? Charged something at the bowling alley? It'll show up here.
Here's where all those charges you've made will come back to haunt you. Each thing you charged with plastic will be listed here, along with the name of the company that charged you. It can be pretty embarrassing, depending on what you've been up to…
You'll want to pay attention to this part; if you see anything that you didn't actually charge to your card, you'll need to call your credit card company immediately to dispute the charge. See $1,000 in charges to World of Warcraft forums even though you don't play video games? You might be the victim of an identity thief.
That, or your little brother is playing a really good prank.
Information About Payments
This is where you'll find the total amount you owe and when you have to make a payment. Your minimum payment is listed, too. Pay attention to the date, and pay as much of your total balance as possible—don't just pay the minimum amount or you'll be in debt forever.
This part lists how long it'll take you to repay your debt if you only pay the minimum amount due each month. You'll want to take a long look at this number as a kick in the butt to pay more than the minimum. You'll also see a warning about what happens if you pay late (spoiler alert: the credit card company will increase your interest rate and charge you a bunch of fees).
Here, you'll see any changes made to your interest rates or account terms. Did you forget to pay your bill last month? Did you overcharge your card by getting a little too eager at the Apple store? If so, your credit card rate will go up, but you'll get a warning about it on your credit card bill so that you can get ready. If any major changes like that happen to your account, you'll get about 45 days of notice, at least.
Interest and Fees
Here, you'll see what it cost you to use plastic last month. If you had late payment fees or overcharge fees, they'll show up here. If you took out cash advances on your card, you'll be charged extra for those, and the deets will show up here. Went to Mexico for Spring Break and charged a bunch of stuff across the border? Those transactions required the credit card company to do some currency rate exchanges, and if they charged you for that (let's be realistic: they probably did) those fees will show up here.
Totals for the Year
The year-to-date totals show you what you paid in interest and additional charges since the start of the year to this month. Fair warning: if you owe a lot, this will be some grim reading.
The Method Behind the Madness
If you're curious about how the company reached the total they came up with, read all about it in the interest charge calculation. It's great beach reading.
Why all the details on your statement?
Congress has passed laws that require credit card companies to make your charges and what you owe very clear. If there's something that doesn't add up or something you don't understand on your bill, be sure to call up the company to ask. You pay them the big bucks so they—or a very nice-sounding machine—can take the time to answer your questions.