Should You Keep Your Credit Card Statements?

Credit cards are one of the best financial innovations that have helped people manage urgent expenses. It can be the best financial tool in the arsenal when used wisely. However, if users are not wise with their expenses, it can lead to a debt trap. Most people are sceptical about using a credit card. They feel it can lead to a debt trap. However, it is contingent on spending habits. Knowing about the best practices related to credit cards can move users in the right direction. Keeping credit card statements is one of the best habits one can develop. Read on to learn more about credit card statements and why keeping them is essential.

What is a credit card statement? 

A credit card statement is a financial document that summarises the credit card transactions during a billing cycle. Credit card statements offer comprehensive insights and can often be overwhelming to read for new users. Most people often ignore their credit card statements. However, it should not be done. Reading these statements cautiously can help users identify unauthorized transactions and billing errors. Reporting these errors timely can help users recover the amount deducted on account of fraudulent/unauthorized transactions. 

Key components of a credit card statement  

Let’s take a quick look into the key components of a credit card statement. 

1. Summary of the account activity

The first and most crucial component in a credit card statement is the summary of account activity. It entails the summary of all transactions on the user’s account. The list of transactions includes payments, credits, purchases, cash advances, interest fees, balance transfers, past amounts due, etc. 

2. Payment information 

The payment information section depicts the total new balance, minimum amount due, and the payment due date. It is vital to abide by the due date and make your payments timely. The payment must be accepted by 5 PM on the due date or before to avoid late charges. 

3. Transactions 

This section shows the list of all transactions done using the credit card since the last statement. The transactions conducted here usually include purchases, credits, balance transfers, cash advances, etc. Credit card issuers often put these transactions in different groups based on the type of transaction, date of transaction, user, etc. Therefore, reviewing the list carefully to report unauthorized transactions is highly recommended. 

4. Fees and interest charges  

Most credit card statements have this section where they mention the fees and interest charges. The interest charges are usually listed by the type of transaction.

5. Minimum payment warning 

The minimum payment warning is issued to users through a credit card statement to avoid the chances of default. This section also includes information on how long it might take to pay off your credit card balance if you only choose to pay the minimum amount. It also provides information on how much the user will likely pay, including the interest fee to repay the entire amount within three years.

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Why is it important to keep a credit card statement? 

Credit card statements offer detailed insights about your expenses, charges, fees, balance transfers, fraudulent transactions, etc. It can be immediately referred to for many things related to a credit card. For example, you can check the card statement to learn about the minimum due amount and the due date before which the payment has to be made. Some users might wonder why keeping a credit card statement is essential. Well, credit card statements can help you identify and report fraudulent transactions up to 60 days from the date of issuance. Here are some crucial benefits of keeping a credit card statement are mentioned below.

• Keep a tab on expenses

One of the most important reasons for keeping your credit card statement is that it helps to keep a tab on your spending patterns. You can quickly review these statements when free to learn about your spending pattern. It can help with effective budget planning as well.

• Identify fraudulent transactions 

Fraudulent transactions can be easily identified and reviewed using a credit card statement. It can also help you avoid late bill payments on account of substantial fraudulent transactions. 

• Avoid penalties and interest hikes 

Credit card statements inform users regarding any penalties or interest rate hikes. Reviewing the statements on a regular basis can help you avoid fines and interest rate hikes in the future. 

• Billing errors 

Adding a zero here and there can dramatically increase your credit card due. This happens due to billing errors. Reviewing credit card statements can help to identify billing errors. 

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Conclusion 

Credit card statements are a powerhouse of information related to various credit card activities. It is essential to review and keep your credit card statements to report fraudulent transactions. A lot can be found using credit card statements.