Reading Your Credit Card Statement

Rebecca LakeUpdated April 17, 2023

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Credit card companies send each customer a card statement every month. This statement includes important details about the account. The Truth in Lending Act (Regulation Z) established certain guidelines about exactly what information must be included with credit card statements. If you use one or more credit cards regularly, it's important to know how to read a credit card statement. Otherwise, you might not fully understand things like the minimum payment due, your payment due date, and how your interest charges are calculated. Fortunately, reading a credit card statement isn't that difficult once you understand what elements it contains. Here are tips to help you with understanding a credit card statement.

What Is a Credit Card Statement?

Before you get into the details of how to read your credit card statement, it helps to know what the term means. Essentially, a credit card statement is a detailed snapshot of your credit card activity during a billing period. A billing period or billing cycle simply means the time period between one statement closing date and the next. Credit card companies can deliver your card statement via paper mail or electronically. (You typically have to opt-in to receive electronic credit card statements.) Federal regulations require your bank or card issuer to deliver your statement to you at least 21 days before the payment due date.

What's Included in a Credit Card Statement?

Your credit card statement contains a lot of information, including some general information that identifies you and is relatively stable. It also includes details about your account activity and the terms of your account. In terms of general information, your card statement should include:

Your name
Your address
The last four digits of your account number

The rest of the information in your credit card statement relates to your account activity. Specifically, you'll see details for:

Transactions
Payments
Interest charges and fees

If you have a rewards credit card, information about rewards will be included as well. And there may be some additional sections that mention things like changes to your account terms or interest rates, if changes are being made.

How to Read a Credit Card Statement

Understanding a credit card statement becomes easier when you understand how credit card companies group and break down information about your account. When reading a credit card statement, you may notice sections for the following:

Account Summary
Payment Information
Transactions
Interest Charge Calculations
Rewards
Notice of Changes to Interest Rate
Important Changes to Your Account Terms

Here's a closer look at what each section of your credit card statement means and how to understand it.

Account Summary

The Account Summary section of your credit card statement offers a snapshot of your account. Typically, this section includes your:

Previous balance
Payments and credits
New purchases
Balance transfers
Cash advances
Past due amount
Fees charged
Interest charged

This information is listed with your new balance showing at the bottom. Your credit card statement balance reflects what you owe for the current billing cycle after payments are applied, new transactions are posted, and any fees and interest charges that have accrued are added.Following this, your Account Summary should include a second section that lists your:

Credit limit
Available credit
Statement closing date
Billing cycle’s number of days

If your card allows you to take out cash advances, your cash advance limit may also be included after your regular credit limit.

Payment Information

After the Account Summary, the next section you may encounter when reading your credit card statement is Payment Information. This section is important because it details your minimum payment and payment due date. Your credit card statement balance may also be listed here again. Additionally, Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) regulations require credit card companies to include two disclosures in the Payment Information section.

Late Payment Warning. This section details the late payment fee and penalty Annual Percentage Rate (APR) that may be applied to your account if you fail to make the minimum payment by the due date listed on your card statement. These credit card fees are important to know and understand.
Minimum Payment Warning. This section advises you that if you make only the minimum payment due that your balance may take longer to pay off and cost you more in interest charges.

If you have a balance showing on your card statement, you'll also see a calculation here of how long it will take to pay off that balance and how much interest you'll pay if you make only the minimum payments. Recommended: Should I Leave a Small Balance on My Credit Card? What You Need to Know

Transactions

Reading a credit card statement's Transactions section is fairly straightforward. This is where you'll see all transactions posted to your account for the statement billing cycle. That includes:

New purchases
Balance transfers
Cash advances
Credits and payments
Fees charged to your account
Interest charged to your account

With fees and interest, you may see different fees listed for different transactions. For example, your card statement may show late fees, balance transfer fees, and cash advance fees listed separately. You may also see interest charges for purchases, balance transfers, and cash advances listed individually (if you have any of those transactions). Your card statement should also break down the total fees and total interest paid for the year to date. This can help you see at a glance how much carrying a balance on your card might be costing you month to month.

Interest Charge Calculations

The Interest Charge Calculations section is one you don't want to skip when reading a credit card statement. Here’s how this section breaks down:

Type of balance that the interest is applied to
APR for each type of balance
The balance subject to interest
Interest charged

Depending on your card, you may see APR and interest charges information for purchases, balance transfers, and/or cash advances. Not all credit cards allow balance transfers or cash advances so if those are missing from your card statement, it could be because you can’t make those transactions. If you spot a (V) symbol in the interest rate section that simply means that your card charges a variable APR. A variable APR is tied to an underlying benchmark rate, which is usually the Prime Rate. If the benchmark rate goes up or down, a variable APR follows suit. Recommended: Is It Possible to Lower the APR on Your Credit Card?

Rewards

If you have a rewards credit card, your statement should include a section for rewards. Here, you'll see:

Your opening rewards balance for the statement period
New rewards you earned during the statement period
Rewards you redeemed
Your ending rewards balance

Your card statement may also show the total rewards you’ve earned during the year to date.

Other Card Statement Details

You may also see other sections on your credit card statement from time to time. For example, if your APR increases because a late payment triggered the penalty APR, that change has to be included on your statement. If your regular purchase APR or balance transfer APR changes, that also has to be explained on your card statement, with wording that tells you what the new APR will be and when it takes effect. Your credit card statement may also include an updated FICO credit score if your credit card company provides one to you. That's a helpful card benefit to have if you're working on building your credit. In fact, there are even credit-builder credit cards you can explore.Finally, your card statement should include a payment coupon. This coupon should tell you:

What your options are for making a payment (i.e. online, over the phone, by mail)
Where to send a payment by mail
Minimum payment due
Payment due date

If you're mailing your payment, you'll want to include the payment coupon with your check. Recommended: Credit Memo vs. Debit Memo Explained

The Takeaway

A credit card statement holds a wealth of information. If you're reading your card statement for the first time, it can seem a little overwhelming. But understanding your credit card statement can help you make sense of what's included on it and what you're paying for the convenience of using plastic.There's also another benefit associated with reading your card statement: It's easier to spot potentially fraudulent activity. If you see a transaction on your statement you didn't authorize, you can reach out to the credit card company to let it know that your account may have been compromised. Finally, monitoring your credit card statements over time may help you see patterns that suggest whether the credit card is a good choice for you. If you decide that it’s time to look for a new card, Lantern’s credit card tool can help you find an option that best fits your needs.

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About the Author

Rebecca Lake

Rebecca Lake is a freelance writer specializing in personal finance, investing and small business. Her work has appeared online at U.S. News and World Report, Forbes Advisor, CreditCards.com and Investopedia. Rebecca writes about a variety of topics for SoFi, including budgeting, saving money and student loans.

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