If you have a credit card, then you'll receive a statement.
Often overlooked, credit card statements arrive, either in the post or via an online interface, every month (or every billing cycle), and contain useful information you can use to help you manage your credit card.
What's in your credit card statement?
Credit card statements vary in their exact format from issuer to issuer, but they all include the same basic information.
Transactions within the billing cycle
All of the transactions you have completed within the billing cycle are detailed in full, including the merchant name, date of the transaction and the amount.
Your statement will show the repayments you have made since the last billing cycle, which should be at least the minimum repayment.
However, if you only ever repay the minimum required, you will pay a considerable amount in interest, as interest compounds. Use our Payoff Calculator to help understand why you should be paying as much as you possibly can each month.
Unless you have made a payment since your issuer prepared your statement, your current balance will be the total of the new transactions, added to any unpaid balance from prior months and any interest that has been incurred.
If you clear your balance in full every month, then you will not accrue interest on your purchases, but you may still incur interest payments if you use your credit card for cash advances (which immediately incur interest).
Often your credit limit, which you should know anyway, will be reiterated in your statement, so you can see how much of your remaining balance is available.
The minimum repayment is the minimum amount of your revolving credit line that you must pay your credit card issuer. The actual amount varies every month depending on your total balance (use our Minimum Repayment Calculator to forecast your next repayment).
Although you may go on to spend more on additional transactions than you clear with your minimum payment, this amount must be paid. If you do not make at least your minimum payment, you are likely to see any introductory offer (e.g. 0% purchases) that you have benefited from withdrawn. You will also incur additional fees and charges, and your failure to pay will be recorded in your credit file, damaging your credit rating and making it harder to obtain credit in the future.
The payment date is the date by which your credit card issuer must have received your monthly payment. It is not the date on which you must pay, as payments can take a couple of days to clear. As such, you should make the payment at least 3 working days before it is required. Alternatively, you may be able to arrange a direct debit with your issuers, who will arrange for the payment to be made in good time.
When you make a payment to your card issuer, the money is applied to different types of transactions in a specific order. Since the introduction of the Consumer Credit Directive in February 2011, credit card issuers have been legally obliged to use repayments to clear balances in descending order of expense, so the most expensive (highest interest) debt is cleared first. However, they are still required to detail the allocation of payments against your account.
Terms & conditions changes
If your issuer plans to make any changes to your terms and conditions, they will probably confirm these in your monthly statement. This could include changes to interest rates (which could affect your allocation of payments) and changes to repayment timeframes.
What should I do with my statement?
Of course, you should file your statement carefully as you may need to return to it at some point in the future. For instance, some shops accept credit card statements instead of receipts for faulty goods you are seeking to return. however, before you file your statement you should check it thoroughly against your credit card receipts for errors or unexpected charges. Often your statement is the first place you can identify fraudulent use of your card, and if this happens you will need to report it to your card issuer as soon as possible.
Unless you have arranged a direct debit, you will also want to note your minimum repayment (or ideally, your full repayment) amount and the date by which you must pay. If you don't have enough to repay in full, make the minimum payment and then send an additional payment for the balance.
What happens if my statement doesn't arrive?
Unfortunately with credit cards, the onus is on you to make the required payment on time. Although not receiving your statement is likely to be viewed as a mitigating factor, it is your responsibility to make a repayment. If you have not received your statement when you expect it to arrive, you should call your credit card issuer immediately.
Equally, if you have the technology available to use online banking or a smartphone app, you should set this up alongside traditional paper-based statements to avoid this predicament.
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