One mistake that lots of people make is that of glossing over their credit card statements. Indeed, there are folks who will only skim through their credit card statements for half a minute or so, before discarding the document, never to look at it again! These tend to be individuals who don’t appreciate that the monthly credit card statement is a serious and sensitive financial document. One that ought to be reviewed with a lot of care.
Having asserted that the credit card statement ought to be analyzed with a great deal of care, the next question that arises is as to what exactly you should be paying attention to, while analyzing it. That is the question we will be attempting to answer in this article. We will do so by outlining some 7 key things that you need to pay attention to, while analyzing your credit card statement. We will also tell you why exactly you need to pay attention to each of these things. This is important because if you don’t know what to look for in a credit card statement, you won’t really be in a position to analyze it meaningfully. You may end up just staring at the document for a long duration of time without making sense of it.
Without further ado, the 7 things you need to pay close attention to while analyzing your credit card statement include:
- The list of transactions made: This is arguably what you should pay most attention to, while analyzing your credit card statement. The foremost objective here is to ensure that all the transactions charged to your credit card are transactions you actually authorized. It is possible for you, while analyzing your credit card statement, to find some transactions you didn’t authorize (which may then be indicative of credit card fraud). It is also possible for you to find transactions where you have been double charged. So you find that, yes, it is a transaction you authorized, but you were double-charged! There is yet another scenario, where you could find transactions charged incorrect (and in some cases higher) amounts of money. So you find that whereas you were expecting to be charged X amount of money for a given transaction, you have actually been charged Y. The credit card issuer sends you statements so that you can get to review such things. Thus, although it may be a tedious task, it is nonetheless important for you to go through your credit card statement with a fine tooth-comb, taking a look at each transaction charged to your credit card within the statement period. Then you need to take action on any anomalies you encounter, however seemingly small they may be.
- The credit card’s closing balance: This is the total amount of money that you owe the credit card’s issuers. It is the credit card statements’ bottom-line. It is essentially an indication of your indebtedness. If you don’t pay attention to the your various credit cards’ closing balances, it is easy for you to end up in a situation where your cumulative credit card debt gets to an overwhelming level. Thus, you need to take a close look at your credit card’s closing balance. It should then inform your decision on whether to continue charging stuff to the credit card. Or whether to stop charging stuff to the credit card/using the credit card, and focus on paying off the accumulated credit card bill for now.
- The minimum amount you need to pay: There is always a minimum amount of money that the credit card issuers expect you to pay, so as to remain in their good books. This amount is indicated on your credit card’s statement, and it is something you should pay close attention to. Remember, the applicable minimum payment amount is the one indicated on your credit card statement, not the one you have in your mind! You have to appreciate that if you fail to make the minimum payment on your credit card, you would be deemed to have started falling into default. This would lead into penalties, and if it persists, it may even lead into a situation where your credit score starts taking a hit. It is therefore important for you to take note of the minimum payment you need to make, and see to it that you honor it. While at it, you should endeavor to pay more than the bare minimum, so as to keep your credit card debt within manageable levels.
- The date when payment is due: The most important thing for you to understand is that you would be at risk of being penalized, if you don’t make the expected minimum payment by the payment due date. So it is important for you to take note of the payment due date, and see to it that you, at the very least, make the minimum payment required by that date. Again, remember, the applicable payment due date is the one indicated on the credit card’s statement, not the one you may be having in your mind!
- Whether there is an overdue payment: An overdue payment would essentially be a blot on your credit card management. An overdue payment indicates that you are beginning to fail on your obligations as a credit cardholder. Therefore, you need to check throughout your credit card statement, to see if there is an indication of an overdue payment anywhere. And if you do find that there is such an overdue payment, you need to ensure that it is cleared as soon a possible, to avoid further penalties and to avoid further damage to your credit score.
- Refunds: If there are any refunds to your credit card, you need to pay close attention to them. You need to understand what the refunds are for, and whether they are refunds you were expecting. If they are not, it may be an indication that some ‘games’ are being played with your credit card, and that would be an important thing for you follow up on.
- The credit card’s interest amount: From your credit card statement, you can get an indication on how much interest you are being charged. This is important in the broader context of personal finance management. Some credit card issuers may even indicate (in the statement) the ‘daily rate’. That can be very useful to you in understanding the cost of the credit that is being extended to you through the credit card — and whether it is worthwhile.