The credit card statement may not be a welcome piece of mail in most homes, but if it is not checked correctly or thoroughly credit card holders could be incurring more costs than they realize.
At first glance the credit card statement can be confusing, but once you know what to look for you can save yourself money and even protect yourself against fraud.
First you’ll want to ensure that you look over the “purchases or new charges” section to review what you purchased over the previous period. Ideally you should keep your charge receipts for all purchases so that when you receive your statement you can check those charge slips against the charges listed on your statement.
What you will be looking for is any instance of double billing or charges for things that you didn’t purchase. There is a reason why you’ll want to catch incorrect charges quickly and that is because there are timelines involved that could work against you.
In many cases if 60 days pass and you continue to pay on your credit card charge account without noticing that there is a charge or charges on the statement for that period that you didn’t make, the credit card company may argue that you accepted the charge(s).
As soon as you see any fraudulent charges (purchases that you did not make), call your credit card company right away to report the fraudulent charge. Most credit card companies will confirm your report and reverse 100% of the charge.
The next item on your statement that you’ll want to pay special attention to are the interest rates that are applied to various charges. For instance if you took out a cash advance, you will likely pay a higher interest rate on that advance than you would on a credit card purchase for an item in a store.
Paying attention to interest rates on your statement will also ensure that you make the best choice about how to use your credit card. Obviously you won’t want to use services that come at a higher interest rate too often, and paying attention to how much you actually pay for that service is a good way to keep yourself in check.
Another section on your credit card statement is your previous balance section. This is the outstanding balance owed from the previous month. Double-check that balance to ensure that it is accurate.
The section outlining your payments and credits is very important. You’ll want to ensure that all payments were properly applied to your outstanding balance and all returns/charge reversals were accurately credited to your account.
You’ll also see on your statement the term “APR.” This stands for “annual percentage rate” and is the interest that is applied to any outstanding balance at the end of the month. The lower the rate, the less you will pay in interest.
What many people may not be aware of is that credit card companies can change the APR even if the APR rate is “fixed.” Banks only have to provide fifteen days’ notice of any changes to the terms of your agreement, like an interest rate increase.
In addition to your APR, some credit cards also apply a “finance charge.” In most cases this only applies if you are carrying a balance. In the event you do not pay off the card’s balance at the end of the month, you will likely pay a finance charge on top of your interest fees.