How to read a credit card statement

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

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If you want to keep track of your credit card spending, make timely repayments and flag any errors, it’s important to understand how to read your credit card statement. Since most credit card providers use a similar layout on their credit card statements, you can use this guide to understand how to read your credit card statement and discover what you need to pay attention to.

Key features on your credit card statement

We’ve outlined the major features of your credit card statement below. We’ve numbered each feature to match the attached example statement to help you find these details on your own statements.

1. The statement period

Your statement period is usually listed in the top left-hand corner of your statement. If you wish to make use of your card’s interest-free days, understanding your statement period is essential. One common mistake many credit card users make is assuming that interest-free days start applying from the date of the purchase. In reality, while credit cards offer up to X number of interest-free days, the exact number of days depends on your statement cycle and when you make the purchase. Keep in mind you must also pay off your balance in full to receive the interest-free days.

For example, let’s assume that your card provides up to 55 interest-free days, and the statement period in question is from 27 February to 26 March. The interest-free period for this statement period would end on 23 April. In this example, if you make a purchase on 27 February, you can make use of 55 interest-free days, and if you make a purchase on 26 March, you get 28 interest-free days.

2. Payment due date

The payment due date is typically listed on the right-hand side of your statement. The payment due date is the date you must make at least the minimum repayment by. While you can pay the minimum repayment – or more – before this date, you’ll be charged a late fee if you pay it after. Paying after your due date can also leave negative marks on your credit report, lower your credit score and could impact your chances of approval if you apply for another card in the future.

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 pay day so you can make sure you have enough money on hand. If you’re just struggling to repay that month, you can also request an extension or explain your predicament to the provider. You can contact your provider directly to request a change to your payment due date.

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% or $10 of your outstanding balance. If you pay less than the minimum repayment amount, you could also be charged a penalty or have your APR increased. While you’re obligated to meet the minimum repayment amount each month, it’s ideal that you pay as much as you can each statement period. If you only pay the minimum amount, it’ll take longer for you to pay off your balance in full. The longer it takes you to pay off your balance in full, the more interest you will pay on what’s already owed.

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 interest that increases your debt, and may have a negative impact on your credit report. Overdue statements are a red flag to lenders and could reduce your likelihood of approval when applying for a future card or loan.

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.

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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 usually present the interest rate as an annual percentage, it’s actually charged on your transactions on a daily basis. 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 cash back 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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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 have a negative impact on 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

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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