Understanding your credit card statement

Your credit card statement is a snapshot of your account. Most of all, it tells you three things: how much you owed to start the period, how much you owed at the end of the period (on the date the statement was printed, called the closing date"), and the transactions that got you from start to end. Formats vary but generally each statement includes the information shown here. Reading your statement is the best way to track spending, monitor charges, and catch errors.

What you’ll see
This explains what your credit has cost you this past period and how the cost was calculated. This information doesn't exist for some cards such as Diners Club, because they don't charge interest.

Previous balance. What you owed on the day the last statement (not this one) was printed.

Purchases. What you bought during this statement period.

Payments. The amount you repaid and that was, therefore, reinstated to your credit line.

Credits. The total amount, if any, credited to your account because you overpaid, a charge was in error, or you returned merchandise.

Finance charge. The amount of interest charged this period. For example, if you're charged 1.5125% every period on the balance you owe, the annual percentage rate (APR) comes to 18.15% a year. For cash advances, you also pay 18.15% but you are charged interest from the day you receive the advance. (You're also charged a fee, typically 2% of the advance with a minimum of $2.50.)

Late charges. The penalty for paying after the due date.

Minimum amount due. The least you're required to pay before the due date.

Payment due date. The date by which the card issuer must receive your payment if you want to avoid a late charge.

Average daily balance. Each day, the card issuer calculates a new balance by adding new purchases and fees and subtracting any payments and credits. At the end of the month, the total of these daily balances is divided by the number of clays in the period. You're then charged interest based on that average amount.

The status of your account
This summarizes your borrowing power.

Closing date (also called "billing date"). The last day of the period. Charges and payments after this elate appear on your next statement.

Credit line (also called "credit limit"). The most you can borrow. If you try to go over, a store will probably be told to refuse the card. If you have a good payment record, you can ask to raise your limit.

Cash advance limit. The most you borrow in cash. Not all card issuers put a limit on cash advances.

New balance. The amount you owed on the day the statement was printed.

Available credit line. What you could have borrowed on the day the statement was printed. (The credit line minus the new balance.)

Available cash limit. The most cash you could have borrowed on the clay, the statement was printed.

The credit you used
You can see a day-by-day tally of the activities involving your account. Check each item carefully for errors. Some people save their receipts and check them against the listing here.

Note:
Over the limit. Some issuers let you go over your credit limit by 10% or so; others consider an extra dollar to be a violation.