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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.
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