How to Read a Credit Card Statement

Ensuring you know the important parts of credit card statements is an important step to making wise financial decisions. Monthly check-ins can ensure your budget is on the right track, and that there are no errors or fraudulent charges that could cost you. You will likely want to review any charges, check your credit score, and ensure any payments are posting as you expect.

To help you better understand the terminology credit card companies use and how specific numbers and percentages play into your total account balance, follow our easy-to-read guide. Please note, this is just a Discover credit card statement example. Not all statements will look the same, but each typically will include the same basic information.

1. What is a Credit Card Statement

Think of a credit card statement as an in-depth summary of how you’ve used your credit card over the course of a billing cycle. Around once a month, your credit card issuer will send a new statement—often several pages long—packed with important details about your transaction history, payment due dates, and more. Some credit card statements also include information about your credit score.

Your most recent credit card statement should be available at any time through your bank’s website, and keep in mind that statements are required by law to be sent at least twenty-one days before payment is due per the Office of the Comptroller of Currency. To keep track of payments and monitor your credit score, it’s best to give credit card statements a close read every billing cycle.

2. Understanding your monthly Credit Card Statement

Account Information: This includes the last four digits of your account number and the open and closing dates this credit card statement applies to.

Account Summary: This section summarizes your transactions for this statement, including your payments and credits, purchases, interest charged, fees charged, balance transfers, and cash advances

Credit Line: Your credit line is your spending limit. Interest and fees may reduce the amount of your available credit line.

Credit Line Available: This number indicates the amount of credit that is still available to you.

New Credit Card Statement Balance: This is the amount of credit you have borrowed and have to pay off plus any finance charges, as of the statement close date.

Minimum Payment Due: You must pay at least this much by the payment due date. You may always pay more than the minimum, up to the total balance.

Payment Due Date: If you don’t pay at least the minimum payment by this date, you will be charged a late fee. Depending on your credit card terms, your interest rate may also increase.

FICO^® Credit Score: Your FICO^® Credit Score is a three-digit number that summarizes the positive and negative information on your credit report.¹ It is used by lenders to quickly assess your credit risk, and it can influence everything from car loans to mortgages to credit cards

Rewards/Cashback Bonus Balance: The cashback amount you have accrued previously, and how much you have accumulated in the billing period.

Payment Coupon: All the information necessary to pay your bill repeats here. Include this coupon with your check if paying by mail

Transactions: In this section, you’ll find a list of all your transactions, or charges and payments, that you’ve made, in the order of the date they occurred.

Interest Charge Calculation: Here, you’ll find the APRs that currently apply to your account, the balances subject to those rates, and the interest charges.

3. Understanding your Credit Card Statement balance

Your credit card statement balance reflects what you owe your card issuer as of the account closing date, which is when one billing cycle ends and your balance is reported to credit bureaus. Remember: a credit card statement balance is just a snapshot of one billing cycle. Your current balance, on the other hand, is more of a live feed of your account information. It commonly shows a different amount than your credit card statement balance because of transactions made and fees charged since your last statement was published.

Your credit card statement balance is the number you should pay off every month to avoid interest fees. Look out for that payment due date and consider setting up Automatic Bill Pay to avoid missing it.

4. Understanding your year-end Credit Card Statement summary

The first step in learning how to read your year-end summary is to find your summary online. If you are a Discover cardholder, log in to your account at Discover.com. Then go to Account Activity and select “Year End Summary (Annual)” from the Account Period drop-down menu.

• Account Information: Your Year End Summary Statement includes the name, address and phone number associated with the credit card account. You’ll also see a line that includes the last four digits of the credit card account number.
• Year End Summary Statement: As the year rolls to a close, this section summarizes the total amount of your purchases, cash advances and balance transfers for the year. These figures may not reflect your current balance, but they can offer a helpful view of credit card activities during the past 12 months.
• Sorting Your Transactions: Sorting your transaction totals can offer a useful overview of your spending patterns. It can also allow you to see where you’re on track with your budget and where you may need work.

You can sort your transactions chronologically by transaction date or post date, or by transaction description, amount or category.

For example, sorting your purchases by category may show you that you spent more than you thought on restaurant meals. Categorizing your transactions by date could show that you spend a lot more on the weekends than you do during your work week. This could be a great way to identify areas where you can shift your habits and save money.

• Taxes and Expenses: The sorting features help you find potentially tax-deductible expenses, like medical bills or moving costs, quickly and easily. This can be particularly helpful for a small business owner or a self-employed freelancer using one credit card for business expenses — they can track business-related deductions via the year end credit card summary.

Though it may look like just another statement, your year-end credit card summary is full of valuable information that can help you at tax time and beyond.