Understanding The Importance Of Your Credit Card Statement
Credit card applications are simple enough for most of us to handle. The card itself is pretty easy to use too. All you need to do is swipe the card and sign. The next part however can be complicated: the consumer card statement. This is what causes a lot of us utter bewilderment.
People take a look at their statement and find it confusing. The terms are complicated, at least at first glance. However, all of these were disclosed on your application before you even got the card. The APR (annual percentage rate was there as well).
You did read it, right? If not, you can probably guess that you should have now. We'll go over the important things you should know about your statement to help you to make sense of your statement.
Your Annual Percentage Rate or APR is the interest which you pay on your balance with the card company. Some credit cards have a fixed APR, while others have variable APR. A variable APR can be changed by the card provider at any time with no warning.
A variable APR is often used as a penalty for cardholders who do not make their payments on time. The issuing card company can raise your APR from for instance, 11% to 23% because of a late payment; it's all in the terms and conditions which you signed.
Due date - this is self explanatory. This is when the card company must receive your payment by. If your payment is even a day late, it will cost you dearly.
You should know when your billing cycle will begin and if possible, choose a billing cycle where the due date arrives after a payday so that you will be certain to make your payments on time. Some of the companies will let you choose your billing date when you sign up; others will even let you change the billing date later - but not all companies will allow this.
Minimum Payment - This is the lowest payment which you can make to remain in good standing with your credit card company. If yours is $27, send $27, or more. Don't send $26 - you will be penalized for failing to make the minimum payment. Every cent counts in making your credit card payments.
Credit limit - This is the maximum amount which you are permitted to charge. This limit depends on your credit history; if you make payments on time for a while, they may increase this limit.
Spending over your credit limit can cause you to have to pay an exorbitant penalty; but more likely will result in the charge being declined. Either way, it's not a mistake you want to make.
People take a look at their statement and find it confusing. The terms are complicated, at least at first glance. However, all of these were disclosed on your application before you even got the card. The APR (annual percentage rate was there as well).
You did read it, right? If not, you can probably guess that you should have now. We'll go over the important things you should know about your statement to help you to make sense of your statement.
Your Annual Percentage Rate or APR is the interest which you pay on your balance with the card company. Some credit cards have a fixed APR, while others have variable APR. A variable APR can be changed by the card provider at any time with no warning.
A variable APR is often used as a penalty for cardholders who do not make their payments on time. The issuing card company can raise your APR from for instance, 11% to 23% because of a late payment; it's all in the terms and conditions which you signed.
Due date - this is self explanatory. This is when the card company must receive your payment by. If your payment is even a day late, it will cost you dearly.
You should know when your billing cycle will begin and if possible, choose a billing cycle where the due date arrives after a payday so that you will be certain to make your payments on time. Some of the companies will let you choose your billing date when you sign up; others will even let you change the billing date later - but not all companies will allow this.
Minimum Payment - This is the lowest payment which you can make to remain in good standing with your credit card company. If yours is $27, send $27, or more. Don't send $26 - you will be penalized for failing to make the minimum payment. Every cent counts in making your credit card payments.
Credit limit - This is the maximum amount which you are permitted to charge. This limit depends on your credit history; if you make payments on time for a while, they may increase this limit.
Spending over your credit limit can cause you to have to pay an exorbitant penalty; but more likely will result in the charge being declined. Either way, it's not a mistake you want to make.
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