How much time do you spend on reading your credit card statements over each month? With the inundation of monthly bills, many of us may skim through our statements and go straight to the payment amount and due date. But the importance of reading your credit card statement goes beyond just avoiding late payments. Reading your statements over carefully is actually one of the easiest ways for you to organize your credit finances, detect inaccuracies, and monitor your credit security.
Check the Terms and Status of Your Account
Card issuers sum up basic information about your account in your statement every month. Become a more alert credit user by paying attention to these items on your statement regularly, just as you would read any notice of a change in terms. Doing so will help you manage your account use and could save you money in the long run.
It is easy to lose track and overextend your accounts, especially if you have more than one credit card or share a joint or authorized-user account with your spouse and children. By keeping track of your credit line and credit availability each month, you can better regulate your credit spending and know exactly how much you can charge on your cards!
- Credit Line shows you the maximum amount you can charge on your credit card.
- Credit Available displays the amount of credit available to you at the end of each billing period.
Finance charge, annual percentage rate, and periodic rate indicate the cost of using your credit card in relations to your charges. They are integrally related to your monthly payment due and their fluctuation may cause a change in how much you have to pay each month. Bear in mind that the annual percentage rate for credit purchase and cash advance usually differs, and understanding your percentage rate can greatly reduce the interests you pay if you carry a large balance. Keep an eye on these rates and their fluctuation (such as an annual interest rate increase at the end of an introductory card offer) and determine your credit payment accordingly. You can reduce your outstanding balance instead of just paying off accumulated interests!
- Finance Charge is the cost of using your credit card in dollar amounts. It includes interest, service and transaction fees, and other items.
- Annual Percentage Rate measures as a percentage what it costs you to use your credit card yearly.
- Periodic Rate is a variable rate that fluctuates each calendar quarter. If your periodic rate increases, your finance charge will increase also.
Detect Fraudulent Activities on Your Card Early
While checking your card statement won't help you detect all forms of credit fraud, it will allow you to catch charges made on your account by anyone other than you. File your receipts or record your credit card charges every month. Then, when your statement arrives, check your records against the charge activities in your statement for any inaccuracies, discrepancies or fraudulent activities on your card.
- Activity Summary lists your charge and cash advance transactions since your last statement. Each transaction has its own reference number that you can use when making inquiries. Also listed are the sold or transaction date (when purchase is made), the post date (when each transaction is recorded on your account), the business where the transaction was made, and the specific amount for each transaction.
If discrepancies appear on your credit card statement, you should:
- Call or write your creditors and notify them immediately. Contact information is given on your credit card statement.
- Call the business where the transaction took place.
- Examine your other card statements extra carefully for other discrepancies that might indicate fraud.
- Check your credit report to make sure no other kinds of fraud involving your credit have occurred. Look for any new accounts you did not open, any changes to your address information, any activity on accounts you normally do not use, or any other unusual or inexplicable information in the report.
Article brought to you by ConsumerInfo.com