How to read your credit card statement

6 min read
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Paying attention to your payments and evaluating your spending are the best ways to stay on track to your financial goals. The easiest way to accomplish these tasks is by reviewing your monthly credit card statement, which contains various information on your account and where you were charged over the past month.

By law, your statement is sent to you at least three weeks prior to your payment due date, but you should be able to find it available at any time through your bank’s website. Reading your statement is important — itemized charges will help you notice trends in your spending and you’ll find important information regarding your outstanding balance and other events related to your account. Regularly checking credit card statements will make you a savvy cardholder, so read on to go through a real-life example breaking down how to interpret the different sections of your credit card statement.

Account summary

account summary
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The account summary provides an outline of where your account stands and your balance total. This will include your current balance, the amount of credit you have available, any fees or interest you’ve been charged since the previous statement and the time period your statement covers. This section may also include figures related to your cash credit line.

It’s vital to know that any transactions occurring after the billing cycle closed won’t be shown on your statement, which can get confusing when you’re trying to check your recent purchases and are instead seeing charges that feel like forever ago. The convenience of online banking takes this worry away, however, thanks to the ability to view your recent activity at any time.

Payment Information

payment information
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Your payment information section will provide you with your outstanding balance and the minimum payment required to avoid late fees or APR increases. Here you’ll also find the date your payment is due, so mark your calendar if you haven’t already set up automatic payments.

Paying less than the minimum requirement, or not getting your payment in by the due date, may lead to a late fee or a spiked interest rate. If you do miss a credit card payment, try to submit at least the minimum as soon as you can — once you’re 60 days overdue you’ll face a penalty interest rate and your delinquent payment will be reported to the three major credit bureaus (Equifax, Experian and TransUnion), resulting in a hit to your credit score.

Late Payment Warning

late payment warning
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Below the table in your payment information section, you’ll find a late payment warning that explains the consequences of untimely payments. Your credit card issuer will provide you with the associated fee and penalty APR you may face if your payment isn’t in by the due date. The fees and penalty APRs will vary, but $39 is the maximum late charge companies can charge. There’s no need to be alarmed by this warning – this information will be presented each statement, even if you have a perfect payment history.

Your credit issuer can’t increase your interest rate to the identified penalty APR until you’re 60 days overdue, but it’ll take a full six month sequence of timely payments to earn your initial rate back. Late payments will also linger on your credit report for up to seven years.

 

Total Minimum Payment Warning

minimum payment warning
Joey Robinson/Bankrate

You’ll also see a total minimum payment warning on your statement, which credit issuers must provide to indicate where you stand in paying off your balance. This section shows how long it would take to pay off your current balance if you were to make only minimum payments. It also provides you with how much interest you’ll pay during that time, giving you an idea of how much that payment pattern will actually cost you.

Credit card providers are required to give you an idea of what you’d need to pay per month — with no additional purchases — in order to pay off the balance in three years (36 months). This comparison will show you the long-term savings opportunity by budgeting and upping your monthly payment amount, if possible. Bankrate’s minimum payment calculator offers a more customizable way to organize your budget, with the ability to input your balance, rate, minimum payment amount and other figures to help determine your ideal payment plan.

Included beneath the minimum payment warning should be your credit counseling notice, which is provided as an option to connect with a non-profit credit counseling agency. If making your payments in time seems to be a potential long-term problem, don’t hesitate to reach out. Short-term issues can often be solved with a phone call or email to your credit issuer, but some circumstances require additional help to start getting debt under control.

Payment Coupon

payment coupon
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Your statement will include a payment coupon for you to include if mailing your payment to ensure it’s applied to the correct account. But if available, utilizing automated payments is the best way to keep your payments consistent. This section will also include your bank’s payment address, which may be useful to keep handy.

Transactions from the Billing Period

transactions
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This section may very well be the most useful information on your credit card statement. Here you can find an itemized list of charges, credits or payments you made over the course of the billing cycle.

Each line will provide you with the date the transaction was made and the date it was posted, along with the location (city and state) and the name of the store, restaurant, gas station or wherever else you charged your card. Each of these transactions will be given a reference number as well as the last four digits of the card used (in the event the account has multiple authorized users). If you use mobile wallets, you’ll likely see the phrase “Virtual Card” rather than your last four digits. Most importantly, this breakdown will show the amount charged for every transaction made, which is a must when checking for discrepancies.

Reviewing this section can help you identify areas where you spend too much and plan your budget. Noticing trends in your monthly charges can be one of the fastest ways to discover what you can cut down on. Plus, it’ll give insight to the categories you spend in most frequently, which is the most important information to know when deciding on the right rewards card — whether it be for travel, airlines, cash back, groceries or anything else.

Also, if your credit card information was stolen without your knowledge and is being used to make small, online transactions that don’t seem out of the ordinary, there’s a chance your bank may not catch it. Those charges will add up over time and may be difficult to dispute, which is why checking this section is crucial — time is of the essence when it comes to finding and reporting any unauthorized charges.

Total Interest and Fees Year-to-Date

total interest and fees
Joey Robinson/Bankrate

Your statement will include a summary of the interest and fees you may have faced in the current year. Even an annual fee will appear here, so don’t be alarmed if this section displays an amount and you’ve done nothing to warrant a penalty fee. Most other fees are avoidable if you know the ways around them and you may be able to negotiate a lower interest rate with your bank if you’re carrying a balance.

Interest Charge Calculation

interest charge calculation
Joey Robinson/Bankrate

Your monthly interest calculation will be shown towards the end of your statement. Each type of balance you have on your credit card can come with different interest rates, which will be shown here. This can be useful when checking on the status of any promotional or introductory APR period, if you’re looking into a cash advance or when you’re interested in executing a balance transfer.

Important Messages

important messages
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Your credit card statement may include an important messages section to brief you on any changes that were made during the billing period, including any changes you requested, such as a credit limit increase or any other notable adjustment.

Know that with some banks, changes to your account will be depicted in different sections. Often times, a shift in the annual fee or your interest rate may be found in an “Account Changes Notification” section rather than here. Your credit issuer is required by law to inform you of all of these changes, but it may take some extra scouring of the document to find it.

Rewards Summary

rewards summary
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It’ll depend on your credit card, but if you’re enrolled in a rewards program you’ll find an overview of where you stand at the end of your statement. Some statements are more inclusive than others, but generally you will find the points you’ve earned during the billing cycle and the total rewards amount available. Keeping an eye on these points is recommended when planning an upcoming vacation or any other big expense you may be working towards.