by : Nick Makaryk

So far it has all been relatively easy. You experienced no difficulty whatsoever in making your application for your new credit card and since you received it you have had so much more spending power. But around four to five weeks later, the statement arrives and this is where the initial confusion arises.

However, what at first appears to be quite overwhelming, once you understand the terminology used on the statement, all becomes clear. Let's face it there should not be any shocks or surprises if you checked out the terms and conditions of the card thoroughly before signing on the dotted line.

But did you? Did you actually take the time and trouble to check all of the small print? Even if you did, there may still be parts of it you are not sure of so shall we take a look at exactly what your statement is saying to you so you can see at a glance what it is all about?

The Annual Percentage Rate (APR) is the amount of interest you are charged on the balance you owe to the company who have issued the credit card. Some cards come with an APR which is fixed and others are variable. In this instance the term variable means that the financial institution involved can alter the rate of interest without giving you any warning whatsoever.

They use this option as a way to penalize those who do not keep their credit card account in order. If you fail to make a payment or make one after the date the monies are due, you could see your APR soar as high as 22% and there is not a single thing you can do about it you agreed to this when you signed up.

Due Date; This is the date by which the company requires you to make your payment. There is no sloping shoulders allowed here so don't even think about holding the Post Office responsible. You paid late and late costs you money!

Check out the date of the credit card billing cycle and choose one which needs to be paid shortly after you receive your monthly paycheck. This way you know you will have the payment covered. Some, but not all credit card companies will let you choose when you would like to pay each month at the time of making your initial application.

Minimum Payment; This is the least amount of money the company will accept as your payment. For example, if the minimum payment is $21 then this is the exact amount you should send. Don't round it up and even more important don't round it down. If you send $20 instead of $21 you have not met your requirements in paying the minimum amount as laid down by the credit card company.

Credit Limit; Usually somewhere on the top of your credit card statement you will see the credit limit with a figure next to it. This is the maximum amount you are allowed to charge, in total, to your card. This amount of your credit limit is assessed by your credit history and is more than likely to be increased from time to time if you make your payments in a timely manner.

If you go over the credit limit allowed, the credit card company can reject the charge or apply a huge penalty to your balance. Either way you can be certain it is going to cost you dearly for such an error on your part.

Reward or Bonus Points; Reward or Bonus points are just what they say. Awarded in relation to your spends, you may receive one point for every $10 dollars you charge to your card. A running total is kept from statement to statement and any points you redeem on the offers available will be taken off your total.

This just about covers the main terms used on your credit card statement but if you discover other parts of the statement which you do not understand, either contact the credit card company direct or take another look at the agreement you signed at the start. The whole purpose of having a credit card is to save you money so make sure you do not end up paying for something which is not necessary, just because you have not taken an interest at the time of making your application.