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How to read a credit card statement

Everything you need to know to read and understand your credit card statement.

A big benefit of using a credit card is that you can use the statement to keep track of your spending. However, to use your credit card statement effectively, you first need to know how to read the statement — and what to do if you spot a problem. Thankfully, most credit card providers use a similar layout for their paper credit card statements; however, online layouts can be slightly different. Still, you can usually figure out what information the creditor is providing by becoming familiar with the various facets of your credit card statement. Read this guide on how to read your credit card statement to get a better idea of what each section means and how to use it to help track spending, spot fraudulent activity and establish better spending habits.

Key features on your credit card statement

To help illustrate the major features of your credit card statement, we’ve included a mock statement from a traditional bank credit card provider. Each section is numbered, to help you find it on the illustrated statement. While your credit card statement may look slightly different, the key is to learn how to spot each section and to know how to use each piece of information to become a better-informed consumer.

1. The statement period

Your statement period is the short time frame where purchases made on the credit card are classified as an interest-free loan. The statement period is usually listed in the top left-hand corner of the statement. To avoid paying interest, be sure to understand the interest-free days offered by your credit card lender. For instance, a common mistake is to assume that the interest-free period starts on the date of a purchase. That’s not correct. Instead, lenders provide a block of days and any purchase within that block will be interest-free until the statement period expires. Say, for example, the credit card offers a 21-day interest-free statement period, starting on your card’s anniversary date of February 12. That means, no interest is charged on any purchase made between February 12 and March 3, as long as you pay the full credit card balance by your next due date. However, if you do not pay your balance in full, any purchase made during this time will start to accumulate interest charges, starting March 4.

2. Payment due date

The payment due date is typically listed on the right-hand side of your statement. The payment due date is when you must make a payment toward the balance owed on the credit card. On this date you can pay the minimum repayment amount — also shown on your statement — or more. If you miss making a payment on the due date, you will pay interest on the outstanding balance and be charged a late payment fee. Plus, missing a payment due date will harm your credit score and negatively impact your chance of getting approved for future loans and credit cards.

If you’re having trouble paying your credit card bill by the due date, you could submit a request for the payment due date to be moved. For example, you might prefer that it falls shortly after your payday so you can make sure you have enough money on hand. Also, if you’re just struggling to make a payment for one month, you can request an extension or call to explain your situation to the lender’s customer service team.

Screenshot of RBC credit card statement with annotations: Screen-Shot-2019-04-20-at-9.38.12-PM1.png Image: Supplied

Screenshot from RBC, annotated by Finder.

3. Minimum repayment amount due

When using a credit card, you’ll be required to pay a minimum amount each month. The minimum repayment is usually 3% of your outstanding balance or $10, whichever is greater. If you pay less than the minimum repayment amount, you could also be charged a penalty or have your interest rate or annual percentage rate (APR) increased. While you’re obligated to meet the minimum repayment amount each month, it’s better if you can repay the full balance or pay more than the minimum, each statement period. Paying only the minimum means it will take much longer for you to pay off debt and the longer it takes you to pay off your balance in full, the more interest you pay.

4. Previous statement balance

If you haven’t paid your credit card bill or have paid less than the minimum repayment, the amount that you’re yet to repay will be detailed in the previous statement balance section of your statement. The longer you have an overdue payment, the more you’ll be charged in late payment fees. Remember, overdue credit card bills collect fees and accumulate more interest and this only increases your overall debt. Plus, overdue payments and higher debt ratios — comparison of your income to debt — the greater the chance your credit score will be negatively impacted.

5. Purchases and debits

The purchases and debits section is a summary of the total amount of money charged to the card during the statement period. It’s wise to look at this balance to make sure the total amount matches up with the transactions that you’ve made. This can help ensure that there aren’t any errors on your statement, such as fraudulent transactions or double charges.

6. Payments & credits

This is the total of all the payments made towards the card, along with any credits, during the given statement period. Some credits can take a few weeks to process, so if you can’t locate the refund on your statement, you might need to contact your bank or the company issuing the refund to make sure that it has gone through properly.

7. New balance

This amount refers to how much you owe towards your credit card account in total. If you pay more than you owe, this figure goes into the negative. So while you’re only obligated to pay the minimum repayment each month, you should aim to pay all of, or as close to, the balance as possible. If you do pay your balance in full each statement period, not only will you avoid paying interest on the balance, you could also qualify for up to a certain number of interest-free days on future purchases.

8. Transactions

This list will detail all of the transactions you’ve made on your card during the statement period. It should include the date of the transaction, the posting date of the transaction, the description of the transaction, the reference code and the dollar amount. Again, it’s wise to look over your transaction history to make sure that you haven’t been charged incorrectly or fraudulently in the previous statement period. Most credit cards also come with mobile apps which allow you to check your transaction history, so you won’t have to wait for your statement to arrive to check these details.

Screenshot of RBC credit card transactions with annotations: Screen-Shot-2019-04-20-at-9.38.26-PM1.png Image: Supplied

Screenshot from RBC, annotated by Finder.

9. Interest rate

While banks present the card’s interest rate as an annual percentage rate (APR), interest is actually charged daily. You can view the interest rate on your account to see how much your balance is collecting in interest, including your purchases, balance transfers and cash advance transactions. Purchases won’t begin to accrue interest until the interest-free grace period ends, however, cash advance transactions usually accrue interest immediately.

10. Rewards points or cash back

This is not standard on all credit card statements since not all credit cards offer rewards points or cash back. You can expect these details only if you use a rewards credit card, a travel rewards credit card or a cashback credit card. If you do, your statement will likely inform you of points or cash back earned during the statement period, the total number of points in your account and points or cash back redeemed during this period. You can also monitor how much points or cash back you’ve earned through your online rewards program account.

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Is it legal to charge customers credit card fees in Canada?

Yes, it is legal for credit card issues to charge customers credit card fees, commonly referred to as credit card surcharge fees. As of October 6, 2022, merchants can now charge customers to cover the credit card fees that card issuers, like Visa and Mastercard, charge merchants to process card purchases.

What are credit card surcharge fees?
Credit card surcharge fees are an extra cost that credit card companies, like Visa and Mastercard, charge merchants every time they process a credit card payment. In general, these fees are between 1% to 3% of the purchase price. In the past, merchants absorbed this fee, as an extra business expense. (It’s also why some merchants refused to accept credit cards as a method of payment.) However, a recent class action lawsuit against Visa, Mastercard and several banks, provided a ruling that allowed merchants to charge customers, directly this credit card surcharge fee.

How do credit card surcharge fees work in Canada?
Canadian merchants must follow regulatory restrictions when charging credit card fees to customers. At this point, merchants must:

    • The credit card surcharge must be cannot be higher than 2.4%
    • Merchants cannot charge surcharge fees in addition to service or convenience fees
    • Merchants cannot charge more for a surcharge fee than it costs them to accept the card

Additionally, merchants must clearly show that they are charging a credit card surcharge fee at the point of sale, in-store, online, at the entrance of physical stores and on every receipt.

Can merchants charge different surcharge fees for different cards?
Merchants in Canada can choose to set surcharge fees based either on the credit card’s brand or on the type of card (e.g. standard vs. premium card), but they can’t charge different fees based on brand or card type.

That means that a store could choose to charge a different surcharge fee for all Visa cards compared to all Mastercard cards. The other option is for a store to charge a different surcharge fee for all premium cards compared to standard cards.

How to manage errors on your credit card statement

While your credit card statement should usually be accurate, there are some instances where you might find an error. If these errors go unreported, they could hurt your credit history and reduce your likelihood of approval when applying for future loans or cards. Plus, it could end up costing you money if an incorrect charge is added to your card balance. This is why it’s so important to keep an eye on your credit card statement.

If you do find an error on your credit card statement, it’s wise to get in contact with your card provider to report and resolve the issue. If you do this soon enough, the errors might not even make it to your credit file. The simple steps you can follow to report and fix an error on your statement include:

  • If you find a purchase you’ve not made, contact your card provider immediately. In some instances, the responsibility to prove you’ve not made the purchase is on you, so make sure you have the relevant receipts and evidence on hand.
  • If you feel you’ve been a victim of identity theft or if your card has been used for fraudulent transactions, you should contact your local police as well as your credit card provider.
  • It’s important to always report fraud to the Canadian Anti-Fraud Centre (CAFC). You can submit a report online here or by calling 1-888-495-8501. See our guide on how to survive credit card fraud for more tips.
  • To check that no errors make it onto your credit report, you’ll have to contact the credit bureaus – Equifax and TransUnion – individually to order a copy of your credit report. You can then get in touch with a credit repair agency to help clean up your credit report. You can reach Equifax at 1-800-465-7166 and TransUnion at 1-877-525-3823.

Learn more about your credit report here

Spending over your credit limit

Depending on the credit card provider, some banks give you the option to exceed your credit limit to avoid embarrassment and inconvenience at the cash register, but you’ll be charged an over-limit fee if you do.

Find out the different instances that might cause you to spend beyond your credit limit, which lenders will let you do so, and what they’ll charge.

Which lenders let you spend over your credit limit?

ProviderNotes
American Express
  • There is no over-limit fee charged and most AMEX credit cards can go over their limit
  • The amount that you can go over your limit is judged on a case-by-case basis factoring in things like the size of the credit limit, previous spending habits and repayment history
BMO
  • You will be charged a $29 over-limit fee if your purchase is approved
  • Your purchase may be declined
CIBC
  • You will be charged a $29 over-limit fee if your purchase is approved
  • Your purchase may be declined
MBNA
  • May vary between credit cards
  • Over-limit fee will be stated on your Product Disclosure Statement
RBC
  • You will be charged a $29 over-limit fee if your purchase is approved
  • Your purchase may be declined
Scotiabank
  • You will be charged a $29 over-limit fee if your purchase is approved
  • Your purchase may be declined
Tangerine
  • You will be charged a $25 over-limit fee (this charge is only added once per statement period)
  • Your purchase may be declined
TD
  • You will be charged a $20 over-limit fee if your purchase is approved
  • Your purchase may be declined

How you might spend over your credit limit

There are plenty of ways you might spend beyond your credit limit including:

  • If you haven’t repaid your balance, then use your card to make a purchase and spend beyond the credit limit.
  • You purchased something at a price greater than your credit limit.
  • You incurred credit card fees. For example, you used your card at an ATM to get a cash advance and these borrowed funds and the fee pushed the balance owed above your credit limit.

The smartest strategy is to keep an eye on your balance, pay attention to any notifications from your bank and either pay down your balance or leave your plastic at home if you’re getting close to exceeding the credit limit.

How to avoid going over your credit limit

  • Set up online, mobile or telephone banking

The simple way to avoid over-limit fees is to keep an eye on your credit card balance. There are a couple of ways you can easily do this, such as setting up Internet or telephone banking. If you have a smartphone, you can download the bank app and monitor your balance at any time.

  • Impose a hard limit on your credit card account

If you have a provider that allows you to spend over your credit limit, the simplest solution is to give your lender a call and let them know that you want to impose a ‘hard limit’ on your credit card account. This means that once you reach your credit limit, any transaction that would have taken you over the limit will be declined.

Should you increase your credit limit?

If you use your credit card regularly, increasing your credit limit could help you avoid penalty fees, earn more rewards points on big-ticket items or allow you to consolidate balances onto one card. On the other hand, it can increase your chances of landing in debt and affect your credit score if you’re unable to pay off your balance in full each month.

Should I increase my credit limit? The answer to that question will depend on how you currently use your credit cards. If you avoid carrying a balance by paying off your credit card bill each month, then it’s worth considering increasing your credit limit. That’s especially true if you find that you want the extra room for big purchases or in case of an emergency.

On the other hand, if you struggle to regularly pay off your balance, or are often tempted to spend more than you should, you should probably avoid increasing your credit limit. You’ll be more likely to spend up to the new limit, and when you can’t pay off your balance, you’ll be further in debt than before you increased the limit.

How to decide if you should increase your credit limit

When you first get a credit card, your provider will usually assign you a credit limit that is affordable for your circumstances. This limit is based on factors including your income, expenditures, existing debt and credit score.

Reasons why you should increase your credit limit

  • It could help your credit score.
    A credit limit increase could help improve your credit score by lowering your credit utilization ratio (the amount of credit used compared to the amount of credit available). So, for example, let’s say you currently have a $500 balance on a credit card with a $1,000 limit. In that case, your credit utilization ratio is 50% – much higher than the maximum utilization ratio of 30%. If you were to increase your credit limit to $2,000, your utilization ratio would drop to 25%, which can help boost your credit score.
  • Increased spending potential.
    You’ll enjoy greater spending power because you can make larger purchases without worrying about maxing out your card and incurring an over-limit fee.
  • Greater rewards earning potential.
    A higher credit limit means you can use your card for more purchases and maximize the points you earn per $1 spent on a rewards or travel card. An increased credit limit could also help maximize your cash back return.
  • Emergency funds.
    You’ll have greater peace of mind since you’ll have access to more credit should the need arise due to an emergency.

Reasons why you should NOT increase your credit limit

  • If you have a bad credit history.
    When assessing your credit limit increase application, the bank will do a hard pull on your credit. This credit inquiry is then recorded on your credit report and can negatively affect your credit score.
  • Potential rejected application.
    If your request is denied, it will impact your credit score and you’ll have to wait longer before you can apply for another credit limit increase or for a new card. Lenders tend to get suspicious when they see many credit inquiries made within a short period on your credit report.
  • Meeting monthly repayments.
    A higher credit limit also means higher minimum monthly repayments if you intend to increase how much you spend on the card.
  • Increased debt risks.
    Having a higher credit limit gives you the option to increase your spending on the card. That flexibility could easily lead to more debt if you’re not disciplined or don’t have the money to repay what you spend.
  • Additional cardholders.
    If you share your credit card with additional cardholders, you run the risk that they could max out your new credit limit.
  • Maxing out issuer-specific credit limit.
    If you have multiple cards with the same issuer, it may set a maximum credit limit across cards.

How to increase your credit limit

If you decide that increasing your credit limit is the right financial move for you after all, here’s how to move forward. There are 4 primary ways to request a credit limit increase: online, on the mobile app, over the phone or at a bank branch.

Online

Most issuers allow you to request a credit limit increase online. You can typically make your request by:

  1. Log in to your online banking account.
  2. Select your credit card account.
  3. At this point, you may see the option to Increase credit limit directly on the page. Otherwise, you may have to navigate to the account management page to locate and select the option.
  4. As part of your request, you’ll typically need to provide a few pieces of information. This can include:
    • Your total annual income.
    • Your employment status.
    • Your monthly rent or mortgage payments.
    • Your desired credit limit.
    • Your reason for requesting an upgrade.
  5. After you fill out all the required questions and submit your request, you should receive a response shortly after, if not immediately.

Using the mobile app

Mobile banking apps are becoming more common in Canada, and more advanced. Similar to the process you would use to request an increased credit limit online, follow these steps:

  1. Log in to your card issuer’s mobile app.
  2. Open the credit card account.
  3. Navigate to the credit card account management page, and select the Increase credit limit option.
  4. You may have to enter the same information that you would if you were applying online, including:
    • Your total annual income.
    • Your employment status.
    • Your monthly rent or mortgage payments.
    • Your desired credit limit.
    • Your reason for requesting an upgrade.
  5. After you’ve supplied all of the required information and submitted your request, you’ll likely receive a response wither immediately or within a short period of time.

Over the phone

Making a credit line request over the phone is similar to making a request online. You’ll need to:

  1. Call your issuer and request to speak with a representative. Depending on your issuer, there might be a specific line to call to make this request.
  2. Answer a few questions similar to making your request online. The difference here is you’ll be speaking with a representative instead of typing your answers. Come prepared with your information as well as the reasons you’re requesting an increase.
  3. Wait to receive an answer regarding your request. This should come a few days after providing your information, although sometime the representative might be able to immediately give you a response over the phone.

How do you reverse a credit card transaction?

Mistakes on your credit card statement can happen. It may be a transaction you don’t recognize, a direct payment after you’ve cancelled it or an instance where the merchant has double-charged you. Whatever the case, you should always immediately bring any inconsistencies in your statement to the bank’s attention, where you’ll be allowed to dispute and reverse incorrect charges. This is especially urgent if you suspect your card has been stolen or breached since you’d want the account instantly frozen to prevent more fraudulent transactions.

What transactions can I dispute?

It is your right as a consumer and account holder to dispute a variety of credit card errors that include:

  • Unauthorized transactions. Any transactions that were not made or authorized by you or an additional cardholder
  • Fraudulent transactions. A transaction that you believe was made fraudulently
  • Inconsistencies. Items on your statement that do not match the item amounts on your receipts
  • Mistakes. Transactions that were mistakenly charged to your account more than once
  • Refunds. Refunds or credits that have not been processed, or that were wrongly processed as debits
  • Cancellations. Charges for a reservation you made but cancelled within the cancellation period
  • Cancelled auto-payments. A cancelled automatic payment is still being deducted
  • Faulty or defective goods. Goods that you paid for but have not received, have been delivered but are not as they were described to arrived faulty or defective
  • Unfulfilled services. Services that have not been rendered
  • ATM errors. An ATM withdrawal that dispensed the incorrect amount of money

What should I check before I dispute a transaction?

Ensure that the charge in question is indeed an error by doing the following:

  • Check all your receipts and transaction records for the period in question, paying close attention to items from the same retailer or financial institution. Try reconciling total amounts over the period, keeping in mind that some transactions may not be processed on the same day.
  • See if you can relate the purchase to something else you bought in the same period, given that some merchants may have different billing names.
  • If you have an additional cardholder, check to make sure the purchase wasn’t theirs.
  • If it is the amount that does not match, check if an exchange rate, international transaction fee or other surcharge was applied by the merchant.
  • If the transaction was for an automatic payment or direct debit that you believe has been cancelled, contact the retailer for clarification. Some contracts specify cut-off dates for cancelling regular payments, which makes the charge legitimate if your notice of cancellation was given after that date.

If you are still unable to resolve the issue after doing all of the above, contact your bank immediately to initiate an investigation.

What happens after my dispute is lodged?

You will receive confirmation from the bank once they have received your request for a dispute resolution. At this point, it may be necessary for you to sign a form authorizing their investigation which you will need to return to the bank in a specified time frame. They will also likely ask that you send them certain documentation for them to properly investigate the dispute. If you fail to provide them with all the necessary information, your dispute will likely be unsuccessful.

Once you have lodged your credit card dispute with your bank, it usually goes through three stages:

Dispute Item RaisedDispute Resolution CreditDispute Item Resolved
The transaction in question is being reviewed.Your account is credited with the correct amount of money.The bank is no longer reviewing the transaction.

What’s the difference between a chargeback and a disputed transaction?

There is a distinct difference between a chargeback to your account and a transaction that needs to be disputed by the bank:

  • Chargeback
    • A chargeback refers to purchases made using a debit directly from your bank account. If such an error is made, you should first try and resolve it yourself directly with the retailer. If not, your bank will dispute the claim with the retailer’s bank but only if you ask within 30 days of the transaction. Make sure that you are prepared to provide the bank with all of the information you have about the transaction and be aware that you might be charged a fee for this service.
  • Disputed transaction
    • This term is used for credit purchases where a charge appears on your statement that you believe was made in error, is in the wrong amount or is for goods that you ordered but were unable to use.

How do I lodge a dispute?

The process for lodging a dispute will vary between banks, however, you can usually lodge a dispute in one (or more) of three ways:

  • Online via your banking website
  • Calling your bank
  • Visiting your bank in person

According to their websites, you can lodge a dispute with the biggest banks in Canada in the following ways:

BankHow to lodge a dispute
RBC
  • You can lodge a dispute by logging into your online banking and selecting the “Investigate This Item” link beside the questionable transaction. If you can’t find this link, navigate to the customer service tab and select “Communications”, then “Contact Us” and then click “Email”.
  • If your inquiry is urgent, call RBC at 1-800-769-2511.
  • Additionally, you can visit a branch in person and receive help.
TD
  • Call TD at 1-800-983-8472.
  • Additionally, you can visit a branch in person and receive help.
BMO
  • Call BMO at 1-800-263-2263.
  • Additionally, you can visit a branch in person and receive help.
Scotiabank
  • Call Scotiabank at 1-800-472-6842.
  • Additionally, you can visit a branch in person and receive help.
CIBC
  • Call CIBC at 1-800-465-4653.
  • Additionally, you can visit a branch in person and receive help.
Tangerine
  • Call Tangerine at 1-888-826-4374.

Bottom line

Your credit card statement might seem like just another bill to deal with at the end of every statement period, but it’s important to look over it rather than just paying your bill each month. Understanding how your statement works will not only ensure that you make timely repayments and avoid collecting interest but will also help you find any errors on your statement and resolve them before they impact your credit file — or your bank balance.

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