If you have just got your first credit card, you might find credit card statements challenging to understand. Fortunately, credit card statements have similar layouts and provide about the same information. As such, you don’t have to learn how to read credit card statements each time you change your card provider.
This article tells you everything you need to know about reading credit card statements so that you can understand them each time you receive one in your mail or email. By the end of the article, you will know how to use your credit card more effectively by using the information provided in your credit card statement.
Credit card statement basic information
The top of your credit card statement will likely contain identifying information, such as the names of the people authorized on the account and the date of the card statement period.
The account summary provides a quick overview of your activity during the specified billing period. It may also contain information about your credit limit, fees, and interest charges.
As an example, here is a credit card statement issued by Royal Bank of Canada (RBC).
Your credit card statement will likely display your account summary near the document’s upper end. In the example above, you see a credit card statement for the period June 11, 2009 – July 10, 2019. The account summary tells you the opening balance on June 11 (the amount of money in the account on that day) and the closing balance on July 10 (the amount of money in the account on that day).
Credit card statement transaction summary
The transaction summary section contains a complete list of transactions during the statement period. Transactions should include the posting date (when the transaction was processed), the transaction date (when the amount was credited or debited), the transaction description, and the transaction amount.
This section may include information on transactions such as payments made to your account, account credits (e.g., refunds), fees that you owe (e.g., late payment fees), interest charges (e.g., if you carry a balance from a previous statement), and cash advances (cash you withdrew against your card’s balance).
Transactions in foreign currencies will include data about the transaction amount, exchange rate, and the name of the foreign currency.
The image below shows a transaction summary from a credit card statement issued by the Royal Bank of Canada.
Payments & interest charges
It is common for credit card statements to include information on interest charge calculation near the end of the statement. This section provides information on your card’s interest rates, the amount of interest, and the balance subject to the interest rates in question.
In the image below, you see a credit card statement from TD. Information on interest charges is given in the section “Payment Information.”
The minimum payment is the minimum amount that the cardholder must pay by the payment due in order to keep the account in good standing. It is usually possible to set up automated payments to avoid missing payments.
The credit limit is the maximum amount that can be used for purchases, cash advances, fees, and interest. This amount is calculated by subtracting the amount the cardholder owns plus the amount of any purchases that have been authorized but not yet posted from the credit limit.
Some credit card statements will give you an estimate of how much time you need to pay your full balance if you make monthly minimum payments. In the TD, the cardholder will need 3 years and 9 months to pay their full balance by making monthly minimum payments. You can make more advanced calculations by using a credit card payment calculator.
The interest rate is usually stated as a yearly rate and is expressed as the annual percentage rate (APR). The annual interest rate represents the yearly rates paid on purchases and cash advances. The statement should also show if the balance was paid in full and how much interest has been charged.
Calculating your credit card balance
In the TD example from the previous section, information about payments and credits is given in the section “Calculating Your Balance”. This section shows how the total account balance is calculated by deducting payments or credits from the previous account balance, then adding new debits, purchases, cash advances, interests, and fees accumulated during the statement period.
Credit card statements will have a rewards summary if you earn credit card rewards.
This section will typically contain information about
- Your previous reward balance (rewards balance prior to this billing cycle)
- Rewards earned this month (how many rewards you earned during the current billing cycle)
- Bonus rewards (if your card offers bonus rewards in specific categories)
- Total rewards available (how many rewards you currently have).
In the example below, you can see the reward summary box from a credit card statement issued by the Royal Bank of Canada.
Things to be aware of when reading a credit card statement
While all of the information provided in a credit card statement can be useful in specific contexts, you may want to pay special attention to the following:
- Your current balance: This will let you know whether your payments are up-to-date
- Fees and credit available: Make sure you haven’t been charged more than you should have in fees and that you are not at risk of going over your available credit
- Suspected charges: If you see a charge that you don’t recognize, phone your credit card issuer, as it might mean someone is using your card fraudulently.
Bottom line: reading a credit card statement is essential to effective money management
While first-time cardholders often find credit card statements confusing, the information in this type of document is easy to read if you know the meaning of each term used. As shown by the examples provided, credit card statements look similar, and once you know how to read one, you can read any.
Always make sure to carefully review your transactions every month. By doing so, you will have a better chance of avoiding behaviors that could affect your credit score and detecting errors and fraud.
Frequently asked questions about credit cards statements in Canada
A credit card statement is a summary of the transactions on your account. For example, it contains information on credits, purchases, payments, balance transfers, interest charges, amounts past due, and fees.
Traditionally, cardholders received their credit card statements in their mail. Today, you can opt to receive electronic statements on a monthly basis. In addition, you should be able to view your credit card statement online at any time by logging into your online account through your credit card issuer’s website or mobile app.
Credit card statements are sent every month.
Yes, you can view your credit card statement online by going to the provided online account and navigating to the statement information.
Keeping your credit card statements is recommended because they can help you track your budget and dispute any billing errors. It is best practice to keep credit card statements for 1 year as an individual and for 6 years if you are a business and have used the credit card for business operations.
On a credit card statement, “CR” stands for “credit.” You may receive credit for several reasons, including refunds from merchants, overpayment, and statement errors.
Yes, you can pay your credit card before you receive your statement, and this is, in fact, a good idea. By making early payments, you can reduce the balance amount the card issuer reports to the credit bureaus, meaning your credit utilization gets lower. This can boost your credit score.
A credit card statement shows each purchase you made during the statement period. A credit card statement will show the merchant from which you bought but will not reveal what type of item or service you purchased.
Your first credit card statement will usually be issued about a month after opening your account.
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