How to Understand Your Credit Card Billing Statement?

by Rahul Kumar

The pandemic has harmed employment and businesses. Lots of business and jobs have suddenly and indefinitely come to a standstill. It has led to a cash crunch situation for many working and self-employed professionals. Thus, they have turned to the best financial product to beat this situation – credit cards.


Further, as the market for credit cards is booming, it has become easy to apply and receive credit cards. You can now apply for credit cards online as well. Most of the banks and NBFCs now offer the option of digital application and submitting documents for the issuance of credit cards for their prospective customers.


Though credit cards seem to be an ideal option, you should use them with financial discipline and caution. One of the main factors while using a credit card is to understand the credit card billing statement. It would help you understand your billing, expenses, and ensure that you do not ever miss a payment.

Below are some tips to understand your statement

  • Due date: The due date is the last date by which you must make the payment on your credit card bill. If payment is made beyond this date, you will be charged interest on the outstanding amount, late payment fees, or both depending on the amount that you repay. Hence, unless you are in a dire situation, always ensure that you pay the entire due before the due date.

  • Minimum Due Amount: It is the minimum amount that you should pay to avoid the late payment fees. However, paying only the minimum does not mean that interest is not chargeable. If you pay any amount lesser than the total amount due, the balance amount will be chargeable to interest. Hence, try to pay the total amount and do not fall into the habit of paying only the minimum amount. It will lead you into a vicious debt cycle and cause financial trouble in the long run.

  • Total outstanding: Your total outstanding is the total of all the billed transactions on your card. Billed transactions are the transactions that happened within the billing cycle. Typically the billing cycle is for one month. Hence, all the transactions for one month will be reflected as the total outstanding amount. Any transaction that you did post the billing date will be billed in the next month.

  • Transactions: It is always a good idea to go through all your transactions. Most of the credit card companies also send SMS alerts to your registered mobile number and email ID. Hence, you can tally the transactions in your statement with your SMS and emails. It will ensure that no extra transactions are billed to you.

  • Complete account summary: The account summary shows the complete financial position of your credit card. It will reflect if you had any previous outstanding balance, payments made towards the card if any, the current outstanding amount, and any extra charges like interest, taxes, fees that have been levied on your card.

  • Reward Points: These are the bonus points that you have in your account. It will show the previous balance, the points you earned this month, points that expired, and the total points that you have which can be redeemed. It will help you analyze where and how you can earn more points. Reward points are sure to make your credit card using experience worth the while.

  • Credit Limit: It is the total limit that the creditor has given you on the card. The credit limit will reflect the total limit, the credit that you have utilized, and the balance credit. It will help you understand how much is your utilization ratio on the card.

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