Skip to main content

How to read your credit card statement?

Users of credit cards receive the credit card statement akin to a bill every single month. Many of us have the tendency to just pay the amount due, without caring to give the bill a proper reading! Sometimes this habit can prove to be costly! Frauds or incorrect payment info might be overlooked!

Do you tend to procrastinate or ignore reading the bill because you do not understand it- Terminologies used are confusing?   Read on to understand your credit card statement better.

Credit card number: This is a unique 16 digit number assigned to you and super imposed on your card. This number is needed to pay your credit card bills through cheque or also for any correspondence with the credit card issuer. Keep this number handy so that you can report to the credit card issuer in case of any theft or fraud. This number will always be stated on your credit cards statement.

Credit Limit: This is the maximum amount the credit card issuer allows you to borrow. This limit is based on you income profile and your payment track record. A good payment track record will help in getting your credit limit enhanced and vice versa. If you exceed the credit limit, the credit card issuer will charge an overdrawn fee. This fee is a fixed percentage of the overdrawn amount subject to a minimum and maximum amount.

Available credit limit: This is the difference between your credit limit and the amount you have spent (total amount due). If you have spent Rs. 20,000 and your credit limit is Rs. 100,000, then your available credit limit is Rs. 80,000.

Payment Due date: This is the date by which the payment should be made i.e. you account should be debited and the credit card issuer should realize the amount on or before this date. So you should be aware that is not the last day on which you can issue the cheque but it is the date by which the cheque should be realized. So issuing the cheque before the due date is not good enough if the amount is not credited into your credit card account by the payment due date. Paying your credit card bill before this date is key to managing your credit card history and your credit score.

Statement date: This is the date on which the bill has been generated. This date is used to calculate the interest amount if you do not pay the full outstanding amount by the payment due date, even though the due date may fall weeks after the statement date.

Cash advance/ Cash limit: Credit card issuers allow you to withdraw cash from the ATM but the amount of cash that you can withdraw is not your credit limit, there is a separate limit called the cash limit. The cash limit is usually 30% of your credit limit. A cash advance will have a one-time transaction fee levied which could be to the tune of 2.5%-3% of the cash withdrawn. In addition interest charges will start accruing immediately. The interest charged on cash withdrawals are more than those charged on your purchases. So this facility is best used only when you need funds on an emergency basis.

Total amount due: This is the total amount outstanding on your credit card i.e. the amount you owe to the credit card company. This amount is a cumulative amount comprising of interest or any other charges such as over drawn fee among other things.

Minimum amount due: The credit card issuer fixes a minimum amount that you need to pay every month which is typically a certain percentage of the total amount due. It is typically 5%-20% of the total amount due. Non-payment of the minimum amount is treated as default and a late payment fee will be levied.

If you opt to pay the minimum amount due, the unpaid amount is carried forward to the next billing cycle and so on, under revolving credit facility. What you need to note here is that, any fresh purchases will not enjoy interest free period i.e. you start paying interest from the day on which the purchase has been made. This will continue till the total amount due has been paid for.  Also even if you pay the minimum amount due, interest will be charged on the total amount due which will include the minimum amount due. So suppose you have paid 60% of the total amount due before the due date, interest will be charged on 100% of the total amount due rather than on the balance 40%. Thus opt for paying minimum amount due only if you're running short of money to pay off the total amount due.

Transaction details: All transactions executed through your credit card, which includes purchase, payments made will be recorded under transactions details. Also any charges levied by the credit card company such as interest, annual fee, late payment charges among other things will also be listed here. It is essential that you go through these details in order to spot any discrepancy.

Reward points:
This is the record of the points accumulated till date. The summary will give details on the opening balance, points redeemed and balance points. You can redeem the accumulated points on a need basis. Each credit card issuer has a different method of redemption.

 

Popular posts from this blog

ULIP Review: ProGrowth Super II

  If you are interested in a death cover that's just big enough, HDFC SL ProGrowth Super II is something worth a try. The beauty is it has something for everybody — you name the risk profile, the category is right up there. But do a SWOT analysis of the basket, and the gloss fades     HDFC SL ProGrowth Super II is a type-II unit-linked insurance plan ( ULIP ). Launched in September 2010, this is a small ticket-size scheme with multiple rider options and adequate death cover. It offers five investment options (funds) — one in each category of large-cap equity, mid-cap equity, balanced, debt and money market fund. COST STRUCTURE: ProGrowth Super II is reasonably priced, with the premium allocation charge lower than most others in the category. However, the scheme's mortality charge is almost 60% that of LIC mortality table for those investing early in life. This charge reduces with age. BENEFITS: Investors can choose a sum assured between 10-40 times the annualised premium...

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...

Section 80CCD

Top SIP Funds Online   Income tax deduction under section 80CCD Under Income Tax, TaxPayers have the benefit of claiming several deductions. Out of the deduction avenues, Section 80CCD provides t axpayer deductions against investments made in specific sector s. Under Section 80CCD, an assessee is eligible to claim deductions against the contributions made to the National Pension Scheme or Atal Pension Yojana. Contributions made by an employer to National Pension Scheme are also eligible for deductions under the provisions of Section 80 CCD. In this article, we will take a look at the primary features of this section, the terms and conditions for claiming deductions, the eligibility to claim such deductions, and some of the commonly asked questions in this regard. There are two parts of Section 80CCD. Subsection 1 of this section refers to tax deductions for all assesses who are central government or state government employees, or self-employed or employed by any other employers. In...

Merger of Tata Indo-Global Infrastructure Fund with Tata Equity Opportunities Fund

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Merger of Tata Indo-Global Infrastructure Fund with Tata Equity Opportunities Fund Tata Mutual Fund has decided to merge Tata Indo-Global Infrastructure Fund with Tata Equity Opportunities Fund, with effect from January 16, 2015.   Investors of Tata Indo-Global Infrastructure Fund can redeem/ switch out units from December 13, 2014 to January 12, 2015 without paying any exit load. For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call Leave a missed Call on 94 8300 8300 Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com --------------------------------------------- Invest Mutual Funds Online Invest Any Mutual Fund Online Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund A...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now