Decoding your Credit Card Statement

Decoding your Credit Card Statement


With credit cards becoming one of the most popular modes of payment these days, one must understand their credit card statements. This is important to help an individual manage and evaluate the usage of their credit cards. These statements give the user a lot of information on their transactions, payments, refunds, and pending balances over the billing period. This valuable data can help an individual evaluate his/her spending patterns, ensure the budget is on track, and identify discrepancies.

Understanding Key Terms and Definitions

Listed below are the important terms that can be found on a credit card statement. Credit card users must familiarise themselves with these terms and what they indicate.

  1. Statement Date: The date on which the billing cycle concludes and signifies the start of a fresh billing cycle.
  2. Payment Due Date: The deadline date by which the user must settle either the entire outstanding dues or the minimum amount. In case the payment is not made by this date, late charges will be levied.
  3. Billing Cycle: It refers to the period between the issuance of two different bills for a specific credit card.
  4. Transaction History: It indicates all the transactions made by the customer using the particular credit card.
  5. Minimum Amount Due: It refers to the minimum amount the user must pay by the due date. Note that interest will be charged on the remaining uncleared balance.
  6. Total Amount Due: It is the total outstanding amount that has to be cleared by the due date.
  7. Credit Limit: It is the maximum amount that can be spent using the card.
  8. Interest Rate: The rate of interest applicable on outstanding balances not paid by the user.
  9. Equated Monthly Instalments (EMI): It refers to the EMI amount on a large purchase, in case the customer has opted for an EMI facility for a certain purchase. 
  10. Rewards: It indicates details of the reward points or cash back earned on transactions made.

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Components of a Credit Card Statement

Listed below are the various components found in a credit card statement:

  1. Details of the cardholder like address, email address, and contact number are visible at the top.
  2. The section titled Payment Summary consists of these details:
    • Total payment due
    • Minimum payment due
    • Statement period
    • Payment due date
    • Credit card number
    • Credit limit
    • Available credit limit
    • Available cash limit
    • Previous balance
    • Statement generation date
  3. The section titled Account Summary consists of these details:
    • Date
    • Transaction details
    • Merchant category
    • Amount
    • Past dues (if any)
    • Domestic transactions details
    • Rewards points summary
    • Offers on the credit card
    • Important information

How to Read and Interpret Transactions

Every credit card holder must read their credit card statements and crosscheck the transactions made. It helps in managing spending habits and helps maintain a good credit profile. A periodic review of the statement is essential to identify any fraudulent activities or errors. This enables the cardholder to address these issues quickly. The statement can be procured via post or email. One must check various details like credit limit, the total amount due, late fees, refunds, EMI debits, and the due date.

Analysing Interest Charges and Fees

While reading the credit card statement, one must analyse the different fees that are levied. Whenever the balance due is not settled and carried forward to the next cycle, interest charges get accrued. Furthermore, one must be aware of various fees levied such as over-limit charges, late payment fees, and foreign transaction fees.

Spotting Errors and Disputing Charges

Cardholders must read their statements thoroughly to spot any fraudulent transactions, incorrect amounts, extra charges or double debits. Any discrepancies must be informed immediately to customer service.

Conclusion

Cardholders must educate themselves on the various components of their credit card to manage their finances in a better way. Regular review of the statements helps them inform the card issuer of any discrepancies or fraud on time. Visit Federal Bank to learn more about their Credit Card offerings. Enjoy unmatched benefits with Federal Bank Lifetime Free Credit Cards.