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Each month, your credit card company will send you a bill on your account. These bills usually have a detachable stub to complete and send in with your payment. However, you should always take the time to review the statement to make sure that:

Here are the key areas to review on your credit card statement:

Account Summary

Your account summary should be displayed at the top of the first page. The most important information to review is the previous balance you had from the prior month, the total amount of purchases you made during the month, cash advances taken out from the account and payments you’ve made during the month. You should also review finance charges and any credits received. The account summary will then take the prior balance and add in the new charges (purchases, cash advances, finance charges) and subtract the payments made and credits to give you your new balance. This new balance is the total amount you currently owe on the card.

Payment Information

You will also see a box called payment information. This takes the total balance that you owe and calculates a minimum payment amount that you need to pay on this account. It is important to note that you are required to pay at least this amount of your bill but you can always choose to pay off more. If you only pay the minimum payment amount each month, you will ultimately be paying far more money in interest and charges than if you were to pay more. The best advice for a consumer is to try to pay off as much of the total balance as possible each month. This will help you to pay down your debt more quickly and cost you less in the long run. Keep in mind that if you pay more than the minimum payment one month, you are still obligated to pay at least the minimum payment in following months.

New Activity

This section will detail each of the purchases you have made during the month and cash advances taken. It provides the date of each purchase, the store or vendor where the purchase was made and the amount. It is important to review this carefully to make sure that these are all your purchases. Mistakes or errors can happen in processing and you don’t want to pay for a purchase you didn’t make.

Finance Charges

Each credit card bill must provide a detailed breakdown of the finance charges. This will include information on both the interest rate you are paying and the amount of interest. The bill will break out what is called the daily periodic rate (which is the interest paid daily) and the annual percentage rate (APR). You should review carefully your Annual Percentage Rate (APR). If the APR or annual interest rate on your bill is higher than you think you should be paying, call the credit card company immediately. Each bill will list the phone number for customer service inquiries.