What is a Credit Card Billing Statement? How to Read Your Monthly Account Summary

I had a friend once who eagerly awaited a reply from a university she applied to. She’d check her mailbox every day to see if anything from the school had arrived.

Finally, the long-awaited letter was delivered. But, rather than tearing into it to see whether she’d been accepted, my friend simply set it on her desk. She was too nervous to open it.

Some people may feel the same kind of anxiety each month when they receive their credit card billing statement. Perhaps they overindulged on vacation or played the role of Santa a little too well. Either way, they might not want to see their total balance.

Other cardholders may avoid their billing statement because they don’t really understand how to read and interpret it.

A credit card billing statement is a monthly record a cardholder receives from a credit card issuer that details the amount of money they owe the issuer, their recent transactions, and other account details including fees and interest charges.

Billing statements are packed with information, including disclosures, interest charge calculations, and notices your issuer wants you to be aware of. A credit card statement can overwhelm someone who isn’t accustomed to reading it. But those who understand it can use it to help them manage their monthly finances. 

Cast any concerns you have about information overload aside and explore the different components that make up a credit card billing statement with me. Who knows, your newly acquired knowledge may cause you to look forward to receiving your billing statement next month — OK, probably not.

Many parents set time aside to assemble a gift for their child the night before Christmas and overreact when they see the gift’s instructions are far more involved than they expected. Those feelings subside, in most cases, when you take your time and progress through each step of the instructions one by one.

Unfamiliar documents — like credit card billing statements — can be daunting when viewed as a whole. Let’s review the components of a billing statement separately to learn what each one communicates to cardholders.  

What a Billing Statement Covers

Credit card billing statements contain plenty of numbers. The more you use your card within a billing period, the more numbers you’ll see on your statement.

Common items represented on a billing statement include:

• Account Summary: People who want to know the main themes and plot points of a book without actually reading it can turn to CliffsNotes, which summarizes a book’s contents, The account summary section of a billing statement is similar to CliffsNotes in that it gives you the main points without all the details that support them. Your balance, or the amount you owe your card issuer, is included in the account summary section alongside the due date of your next payment. You’ll also find your credit limit or the total amount of money you can access with your card, and your available credit, which is the remaining money you can use after deducting amounts you owe your issuer, here.
• Transaction Details: All charges, credits, and payments made during the period. Your billing statement will include all the transactions you made with your card since the last billing statement. Transaction information generally includes the date of the transaction, its amount, and the party you transacted with. It’s not only new charges included within your transaction details. You’ll also find a list of any payments you submitted during a billing period and any credits your issuer applied to your account. For cardholders who use cards that offer cash back, you may see a deduction of those rewards on your bill if you redeemed them during that billing period.
• Payment Information: One of the reasons credit cards are popular payment tools is they allow you to buy an item today and pay for it later. Your credit card billing statement will include the minimum payment due for that cycle and its due date. Cardholders who aren’t able to pay the minimum amount due by its due date may be assessed a late fee and a penalty APR, so strive to make at least the minimum payment each month. But just making the minimum payment isn’t a recommended strategy for those looking to avoid extra charges. Unpaid portions of your total balance will accrue interest, and credit card companies tend to charge relatively high interest rates. 
• Fees and Interest Charges: Those interest charges I just mentioned will be listed on your billing statement along with other fees you’ve accumulated. Common types of fees credit card issuers charge include those for balance transfers, cash advances, foreign transactions, and late payments. Some cards also come with an annual fee. Review your cardmember agreement to learn what fees your issuer charges and how much they charge for each instance of a fee. Cardholders who sidestep fees are rewarded by seeing this amount — $0.00 — listed on their billing statement next to where total fees and interest charges are displayed.

Key Dates on a Billing Statement

I’ve mostly focused on the financial figures a billing statement contains, but it’s time now to discuss the one resource that many people believe is more valuable than money — time. Billing statements include a few key dates cardholders need to take note of, including:  

• Billing Cycle Date: A billing cycle usually lasts around a month. As months can vary in length by a few days from one month to the next, so can billing cycles. Your billing statement will include the dates associated with the cycle for that statement. Note that a statement’s end date may be communicated as a “closing date” on your bill.
• Due Date: Cardholders who want to steer clear of fees should be mindful of the date their payment is due. The payment due date, often listed near the minimum payment due amount, lets a cardholder know the date by which the issuer must receive payment to avoid late charges. Due dates don’t account for delivery times, so, if you’re paying by snail mail, be sure to send your payment in earlier to account for its journey.
• Grace Period End: Credit cards wouldn’t be nearly as popular as they are if payments made with them began accruing interest as soon as they were processed. Many issuers offer grace periods that give borrowers some breathing room to pay their full balance before the due date without incurring any interest fees. If you can’t find the grace period on your billing statement, you can figure it out on your own. It’s the date between the end of a billing cycle and the payment due date.

Common Types of Billing Statements

I was watching an old movie the other week where a time traveler went way into the future to explore life in the 2000s. Cars could fly and everyone wore shiny, one-piece uniforms in the film’s depiction of the future. 

Most of the movie’s predictions of life in the 2000s haven’t come true yet, but technological advances can help us stay on top of our finances in the 21st century. 

Cardholders have plenty of options when it comes to viewing their billing statements these days. Here are a few ways consumers can access their statements:

• Digital Statements: Want to reduce clutter in your life and take a step toward saving a tree? Opt for digital billing statements. Digital statements contain the components I covered above, but as their name gives away, they come in electronic form rather than physical. It’s easy to overlook things as we hustle to complete our daily responsibilities, so make sure you’re receiving electronic messages from your card issuer. Many credit card companies will notify you via email or text when your new digital statement is available. 
• Paper Statements: Paper billing statements are ideal for people who don’t own a computer or smartphone. Paper statements arrive by mail, acting as a form of reminder that your payment due date is coming up. If you opt to receive paper billing statements, be mindful of times when you’re away from home or otherwise don’t have access to your mail for an extended period. Trying to get out of a late fee because you haven’t opened your mail might get you as far as those times when you pleaded with your teacher that Fido ate your essay for dinner.
• Hybrid Options: Hybrid options allow you to tailor your statement delivery preferences to what suits you. Some issuers allow cardholders to receive statement summaries in their email, providing the full statement through their online interface. You may also be able to receive digital and paper copies of your billing statement each month. Check with your issuer to see what options you have, and select a delivery method that helps you manage your credit card payments best.

Credit card issuers provide so many ways for you to access your statement because it is important to read it and understand the charges.

No matter what form of delivery method you choose for your credit card billing statements, you may forget to look at your statement at times. 

Fortunately, cardholders can also use tools to remind them of payment due dates and help them manage their card spend.

Set Up Reminders or Automatic Payments

One way to avoid late fees is to automate the payment of your credit card bill. You can enable payments to automatically draft from your bank account on a specified date. 

Just be sure your account has enough funds in it prior to a scheduled automatic payment to avoid costly overdraft charges.

Cardholders can also set calendar alerts on their phone or another device to remind themselves of upcoming payment due dates. Many issuers even allow you to opt-in to app, text, or email alerts that you typically receive a few days before your bill is due

Use Online Banking Tools and Resources

Your credit card issuer likely offers you the ability to access your card information online by enrolling in their account portal. Through the account portal, you’ll be able to access your card’s current and past statements and other helpful information that can help you manage your card activity. 

You can also see a list of recent transactions you’ve made with your credit card through your issuer’s account portal.

Not all apps are created equal, but some of the best ones can help you manage your spend so you can stick to a budget. Read user reviews to better understand what a financial app offers and select the one that will most help you manage your financial documents, including credit card statements.

Seek Assistance if Needed

Ringo Starr once sang, “I get by with a little help from my friends.” Sometimes, we also need a little help from our credit card issuer.

Don’t hesitate to contact your card’s customer support department when you have a question about something on your statement — that’s what they’re there for.

If you notice an unfamiliar charge among your recent transactions, you can also dispute it. 

You can call your issuer to begin the dispute process, but they’ll likely allow you to submit a dispute through their online portal. This can be a good option when you want to expedite the dispute process and enjoy the convenience of sending documents to your issuer electronically 

Receiving your credit card bill each month won’t help you manage your finances better if you don’t also make sound financial decisions. 

You can analyze your bill each month to help you improve the choices you make with your credit.

1. Track Spending Habits

Tracking your spending trends over time can help you identify instances where you spend more than you wanted to.

Maybe you spend too much at the beginning of every month or after you receive your paycheck. 

Knowing where the problems lie will help you fix them.

You can also group your spending into categories and budget how much you want to allow each month for specific categories. Are you enamored with the new bakery that opened next to your workplace? Forecasting how much you can afford to spend on baked goods each month, and tracking that spend, could save you from going into debt over artisanal pastries.

2. Avoid Penalties and Interest

Credit card companies impose fees for different transactions, but most fees they charge are avoidable. Learn what actions trigger fees and be diligent to avoid them. 

One surefire way to be hit with extra charges is by not paying your balance in full and accruing interest expenses. If you don’t pay your balance in full, you’ll also lose your grace period, if your card has one.

Interest can add up quickly, so take time to understand how your issuer calculates interest, which is communicated on your statement, and make every effort to avoid unnecessary interest fees. 

3. Identify Fraudulent Transactions

Life’s expensive enough without having to pay for fraudulent transactions.

Monitor your credit card activity to identify any transactions you don’t recognize, and contact your credit card issuer immediately should you spot anything that doesn’t look familiar. 

You can visit AnnualCreditReport.com to get copies of your credit reports from Equifax, Experian, and TransUnion for free. You can also access them as often as once per week if you want to stay more vigilant.

You may need to file a dispute to remove the charge in question, but doing so can help you save money and avoid negative impacts on your credit profile. 

Credit card billing statements contain a wealth of details that can help you manage your card spending. So don’t be afraid to open (or navigate to) your statement. It might just help you make a better plan for the future.

Review it each month, and you’ll be one step closer to aligning your spending with your overall financial goals.