Deciphering Your Monthly Statement

Knowing how to read your monthly credit card statement — and understanding the key terms you will find on it — will help you responsibly manage your account. Here are the key things you need to know.

Terms What it Means Smart Advice
APR (Annual Percentage Rate) The annual interest rate you are charged on your unpaid balance. You may have several different rates; for example, one rate for new purchases and another rate for balance transfers. Keep an eye on the APR each month. If it goes up, ask your bank why…and consider shopping around to see if you can get a better APR offer.
Available Credit Line The amount of unused credit available.
  • Do not view this as a license to go spend more. Remember,you need to pay for what you buy.
  • Try to keep your purchases below 25% of your total credit limit.
Cash Advance Limit The amount of cash your card issuer is making available for withdrawal against your credit line.
  • Do not view this as a “CASH AVAILABLE TO SPEND” sign. The APR on Cash Advances is generally higher than on purchases.
  • View it as an “Emergency Fund.”
Finance Charge The interest and other fees assessed by the bank to finance your unpaid balance. This charge is directly tied to your APR. Whenever possible, pay the entire balance due every month to avoid finance charges. If you can't pay off your balance each month, pay as much as you can to minimize the finance charge assessed on your outstanding balance.
Minimum Amount Due The smallest payment you can make (by the due date) to meet the terms of your card agreement. Get in the habit of paying off your balances every month…or at the very least paying as much as you possibly can. This will minimize your interest payments.
New Balance Total amount you owe, based on when the current Statement Period closed. Whenever possible, pay off the entire balance every month. If you can't, make the largest payment you possibly can.
Past Due Status of your account when the minimum payment is not received by its due date.
  • Don't miss a payment deadline. This could result in a:
    • Increase to your APR and
    • Negative entry on your Credit Report.
  • Consider activating an electronic payment schedule with your bank.
Payment Due Date Date your payment is due.
  • Mark your calendar to pay your bill at least 5 days before the due date, to be sure the payment is processed by the deadline.
  • Or consider activating an electronic payment schedule with your bank.
Periodic Rate The interest rate for a particular subdivision of the year (a monthly periodic rate is 1/12th of your annual interest rate). Calculate the monthly interest rate against your total monthly purchases. This will show you how much you will pay in interest charges that month…which can be a powerful incentive to pay off as much of your balance as possible.
Post Date Date that a purchase, cash advance, fee or payment is recorded by the card issuer. Track your purchases and their posting date against your purchase receipts to make sure they match.
  • If you see a purchase you don't recall making on that date, investigate it further. This is one way to catch potential fraud.
  • You may find out that you just forgot making that purchase on that date…but you won't know that unless you investigate it.
Total Credit Line/Limit The total amount of credit and the limit your card issuer has given you. Try to keep your purchases below 25% of your total credit limit, which can help improve your credit score. (FICO)

BBB Tip: Protecting Yourself from Unauthorized Charges

  • First, check your own records. If you are sure you did not make the charge, call the merchant to request a credit, no matter how small the charge. Some identity thieves ‘experiment’ with a small, unauthorized charge to see if you’ll notice before they take the next step.
  • If the merchant does not respond to you or reverse the charge, call the Customer Service number at your issuing bank, and find out what their process is to dispute a charge with a merchant.