Credit Card Statement
In addition to providing crucial information about a person’s credit card, a credit card statement is an essential financial document. The statement provides details on all payments made using the card as well as any amounts credited to it. Statements for credit cards are lengthy because they include information about every transaction you have made. Checking all the information listed on your statement helps you keep track of how you are using your credit card.
What is a Credit Card Statement?
Essentially, a credit card statement is a billing document that lists all the payments, purchases, credit, and debit transactions made with it or towards it. Statements from credit cards are long because they contain a lot of information. The cardholder should go over all the information listed on their statement in order to keep track of how their credit card is being used.
How to Get Your Credit Card Statement
There are several ways to get your credit card statement, both online and offline:
Online: Card issuers send credit card statements to your registered email ID on the same date every month, or billing date. You can also access your credit card statement online by logging into your bank’s net banking portal. Customers receive an SMS informing them of the total amount due and the minimum amount due on their credit cards.
Offline: In this case, a credit card statement is mailed by the bank to the customer at his home. By calling the customer care department or visiting the nearest branch, you can request a physical copy of the statement.
How to Read Credit Card Statements
In India, every credit card provider sends its cardholders a monthly statement explaining the transactions made on their card. The majority of credit cardholders do not take the time to read and understand these statements. It is very important to know how to read your credit card statement if you have a credit card.
The credit card statement contains very important information about your card, such as the billing cycle, your total outstanding due amount, and your available credit limit. Additionally, it details every transaction you made with your card, including the merchant name, date, time, and amount.
You can receive your credit card monthly statement online or by mail. Check your credit card’s finance charges. Finance charges are the interest rate charged on your credit card for that particular billing cycle. Make sure the right amount is debited from your card if you have any EMIs. Also check your statement for the available credit limit, the total bill amount, the due date, the billing period, late fees if any, and refunds.
Understanding a Credit Card Statement
A credit card statement contains several components, as listed above. It can be confusing to understand some of these components. Below, we have explained the most common yet confusing sections:
- Payment Due Date: If the cardholder owes a balance on their credit card, they will need to pay it off monthly. Credit card issuers require each of these payments to be made by a certain date. Payments are due on this date.
- Minimum payment due: The minimum payment that a cardholder must make to avoid a late payment fee is the minimum amount due. As a general rule, banks charge 5% of the total outstanding balance on the credit card as a minimum payment. Rather than being charged a late fee, the cardholder will be charged interest on the remaining outstanding amount.
- Limit of credit: Simply put, a limit of credit is the maximum amount of credit a cardholder can borrow from a single bank account. Credit card issuers set credit limits based on information provided by applicants on their credit card applications. Banks consider several factors before setting a credit limit for an applicant. Various factors are considered, ranging from the applicant’s credit worthiness to their annual salary.
- Current outstanding balance: The outstanding balance of a credit card refers to the total amount owed by the cardholder to the bank or credit card company. A credit card’s outstanding balance is calculated based on the previous month’s expenditures. The outstanding balance on a credit card bill, for example, is the total amount due within a billing period.
- Billing cycle: The time interval between two bills issued by a particular credit card. In January, a billing cycle begins on the 1st and ends on the 30th. Therefore, the next bill will be issued on February 1. Billing cycles can last from 20 to 45 days. The billing cycle is determined by the bank or credit card issuer.
- Transaction history: It records all debit and credit transactions the cardholder makes with the card. Each account has detailed information that can be accessed at any time by the cardholder. Banks keep track of cardholder transactions and make them available through netbanking services.
- Reward points and rebates: By using a credit card, cardholders can accumulate reward points that can be redeemed for attractive gifts from the bank’s catalogue. The cardholder’s credit card statement has a section for them to fill in about their rewards and rebates. As a result, banks keep their customers updated to enhance their shopping experience.
How the Minimum Amount Due is Calculated
In general, minimum amount refers to the percent of the outstanding balance used to calculate the cardholder’s minimum payment. In India, banks generally charge 5% of the outstanding balance as the minimum amount due. The minimum amount due will be increased if the cardholder converts their expenditure to EMI or uses EMI balance transfer. Suppose the cardholder made a purchase of Rs.10,000 on July 15 and the due date is August 26, the minimum payment will be Rs.500 (5% of Rs.10,000).