In the first part of this two part Layman's guide to credit card monthly statements, we learned about few very important terms that credit card companies use in their monthly statements. This second part continues the process further.
Finance charges
This section will contain the amount credit card company charges for using the credit card. There are few good credit card companies out there who won't charge you a penny if you are good at repayment and clear all your outstanding balances every month. Some are not so good and levy finance charge without giving any regard to your repayment record. If you find that the finance charges are hitting you below the belt, you can ask the credit card companies to waive it, remember there is nothing fixed with the credit card companies, you can negotiate every bit if you have the right credit history and other credentials.
Minimum payments
This is the minimum amount you should pay to the credit card company for that particular month. A percentage of your outstanding balances (usually between 2-3%) the monthly minimum payment, saves you from repayment default in case you are not able to pay the balances in full. The monthly payment should read the credit card company well before the due date. If you feel comfortable in paying just the monthly minimum, think again. It is the worst possible credit card repayment practice.
Due Date
Your credit card balance repayment should reach the credit card company by this date. Ideally, the repayment schedule should be such that it reaches well ahead of this stipulated time. The due date is generally 20-30 days from the date of printing the bill. A good practice is to repay the bill online. This saves a lot of time and hassles and keeps the uncertainties at bay.
Credit limit
The credit limit section in your monthly credit card statement tells you about the amount you can borrow from your credit card. This depends on lot of factors some of which are your credit history, repayment records and financial health. It is good to stay within the credit limits or the good old over the limit fees is slapped.
The late payment fees
If any of your payments to the credit card companies didn't reach on time or you didn't pay at all a late payment fee will be charged and mentioned in this section. Averaging anything between $20- $40 the late payment fees is a costly reminder to repay your balances on time. If you regularly default on repayments they can burn a huge hole in your pocket and cause a significant damage to your credit history.
Other Fees
If you have crossed your credit limits your credit card monthly statement will contain a over the limit fee. If the credit card has been with you for more than a year there will be a Annual fees listed here. There are various other insurance charges and fees credit card companies charge, all of them will be listed in miscellaneous fees section. Check this section carefully for anything out of sync with the credit card terms and conditions. It is very easy to overlook few dollars but imagine what if thousands and millions of customer overlook any such discrepancy, it will be a bonanza for the credit card company.
In addition to all these terms the credit card monthly statement has a record of your name, address, account numbers, zip codes etc. Though these facts may sound trivial, but it is important to check that they are correct. This is what credit card company has in its records and this is what it will report to the credit rating agencies. If you find anything which is not correct, its your duty to get it corrected.
Concluding, the credit card monthly statement is a document too important to be dealt in slack manner. Understanding every part of it will make you an informed credit card holder whose careful and incisive outlook will keep him away from any credit card blues.
