What Makes up a Monthly Billing Statement?

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Every month you will receive a monthly billing statement on each credit card that you own, either on a paper or electronically. This is the credit card company's way of demanding payment and giving information for using a credit card to purchase goods and services. 

There are multiple sections on a monthly billing statement, and it is very important to understand each one to make sure you are getting the best usage out of your credit as well as to uncover any errors or mistakes on your account.  Make sure you review and understand the statement before you pay the requested minimum payment amount. It is up to you to be responsible for making sure your accounts are complete and accurate. 

In this chapter, we will review every section that appears on a monthly billing statement. Keep in mind that statements might appear different, but are all required to provide the information listed below. 

1. Summary of account activity

The summary section of your credit card statement shows basic transactions on your account at a glance. It includes the total amounts the following activities during the time period covered by the statement:

  • Payments
  • Credits (i.e. refunds)
  • Purchases
  • Balance transfers
  • Cash advances
  • Fees
  • Interest charges
  • Amounts past due
  • New balance
  • Available credit*
  • The last day of the billing period

Charges made to your card after the last day of the billing period will show up on your next month's bill. 

Notice that the cut-off date of activities and the due date of your payment remain constant for each billing period. You should have 21 days before your payment is due (from the date of the statement) and the same due date each month. This will help you in setting up your monthly budget to know when to expect your bills to arrive.

*Available credit is your credit limit minus the amount you owe.

2. Payment information

Payment information includes your total new balance, minimum payment amount, and a due date of your payment. A payment generally is considered on time if received by 5 p.m. on a due date. If you mail your payment and your due date is on a weekend or holiday, your payment is considered on time if it arrives by 5 p.m. on the next business day.

3. Late payment warning

Late payment warnings inform you of any additional fees and a higher interest rate that may be charged if your payment is late. A late fee is approximately $25-$41 unless the user is late multiple times in a six-month consecutive period.  The maximum late fee can change as it's allowed to be adjusted for inflation. 

4. Minimum payment warning

Minimum payment warning includes an estimate of how long it can take to pay off your credit card balance if you make only the minimum payment each month. It also includes an estimate of how much you likely will pay, including interest, in order to pay off your bill in three years (assuming you have no additional charges). This is extremely valuable information if you are making a plan to conquer debts and pay down the credit card to a zero balance. You should never charge your credit card more than your ability to pay in full and on time the following month.

5. Notice for changes in your interest rates

If you go over your credit limit or pay your bill late, you trigger the penalty rate. Your credit card company may notify that your rates will be increasing. 

6. Other changes to your account terms

If your credit card company is going to raise interest rates and/or fees, or make other significant changes to your account, it must notify you at least 45 days before the changes take effect.

7. Transactions

A list of transactions show all transactions that have occurred since your last statement, including purchases, payments, credits, cash advances, and balance transfers. Some credit card companies group them by type of transaction or by date of transaction. Some companies list them by a user if there are different users on the account. Review the list carefully to make sure that you recognize all of the transactions.

8. Fees and interest charges

Credit card companies must list fees and interest charges separately on your monthly bill. Interest charges must be listed by type of transaction. For example, you may be charged a different interest rate for purchases than for cash advances. Cash advances allow cardholders to borrow money against their existing credit line through banks, ATMs, or special checks.

9. Year‐to‐date totals

Year-to-date totals are the total amount that you have paid in fees and interest charges for the current year. You can avoid some fees, such as over‐the‐limit fees, by managing how much you charge to your card and by paying on time.

10. Interest charge calculation

A billing statement also shows a summary of interest rates on the different types of transactions, account balances, and the interest charged for each type of transaction.