Understanding Your Credit Card Statement

The credit card application is straightforward and fairly easy for most people to complete. Using the card is easy too - just swipe and sign. Next comes the consumer credit card statement and that stops some people in their tracks.

At first glance, they think it's confusing - but it's not if you understand the terms used on that statement. None of this is a surprise. All of the terms and conditions - as well as the annual percentage rate (APR) - were disclosed to you in the application.

Did you read it? If you didn't read it, now you know why it was important. Let’s go over the major terms you’ll find on your credit card statement so that you can quickly decipher your monthly bill.

APR – the Annual Percentage Rate is what you pay on the balance you owe to the credit card company. Some cards have a fixed APR and others have a variable APR. The variable APR means that the bank or financial institution can change the rate at any time without warning.
This is a way to penalize deadbeats. Fail to make a payment or not make the minimum payment and watch your APR go from 12% to upwards of 22% without warning - and there’s nothing you can do about it because you signed on the dotted line.

Due date – This is the date that the payment must be received. Don’t bother to blame the post office. If your payment arrives even one day late, there’s no grace period. Late is late, and late is costly.

Find out the date of the credit card billing cycle. Choose a cycle that hits just after your paycheck so you know you’ll have money for the payment. You can find a credit card company that lets you choose the billing cycle date when you fill out the initial application. Some companies let you change the billing date while others don't.

Minimum Payment – This is the least you can pay to stay current with your credit card debt. If the amount is $21, then send exactly that amount or round up to $25. Don’t send $20 or you won’t get credited with making the minimum payment. Even a minor dollar difference counts here.

Credit limit – Printed on each monthly statement, the credit limit is the maximum amount that you’re allowed to charge. This amount is based on your credit history and may be increased periodically if you’re a prompt payer.

Going over your credit limit may result in your charge being denied or a big penalty fee for the over-charge amount being tacked onto your bill. Either way, its going to cost you too much for that mistake.

Reward or Bonus Points – These points accrue based on a formula that’s related to your spending. For example, you might get one reward point for every ten dollars you spend. The points will be tracked on your monthly statement as a running total. Any points used will be subtracted from the total.

If there are any other terms that you don’t understand, call your credit card company or get out the initial agreement you signed and see if you can find out what it means. You don’t want to be paying for something that isn’t necessary.

Choosing the Best Consumer Credit Card

Consumer credit cards can vary dramatically in terms and conditions that either cost or save you money.

Because financial institutions are extremely competitive in marketing credit cards, you'll find different terms and conditions among the suppliers. If you’re a smart shopper, you’ll pay attention to the fine print, when choosing the best consumer credit card.

Naturally you want the most credit for the least long-term cost. Look for a credit card with a low APR. That's the Annual Percentage Rate or the actual cost for credit. It's basically the price of renting the credit card company's money for a period of time.

Time is of the essence here. Make the minimum monthly payment on time, every time and you'll keep the stated APR. If your payment is late (or missing), some cards bump up your APR by several percentage points.

A late payment could boost your APR into the 18-22% range and it stays there – there’s no reduction for making the next payment, because your late payment threw you into the high APR penalty box with no escape clause.

Let's assume that you’re a good credit risk and you’ll make the monthly payments on time. Look for a card that gives a little something extra, like bonus points that can be traded for gifts, restaurant meals, movie tickets, music downloads or travel and hotel stays. As you spend on your credit card, you actually earn something else that you want. That's making a good deal even better. There are some people who charge everything and pay in full each month, and are easily able to afford roundtrip first-class tickets anywhere in the world each year!

The fastest way to get a credit card and start shopping is to apply for the card online. In mere minutes, you can complete the credit card application and get approval almost immediately if your credit checks out.

With instant credit, some companies give you a small opening limit so you can shop online right away. You have to wait a few days (usually 7-10 business days) for the actual card to arrive by snail mail.

If you currently have a high interest credit card, you may be able to find a better deal online where you can transfer the balance and pay 0% interest for 6 months, or some comparable transfer incentive that makes it worth your while to make the switch.

Which Is the Best Credit Card for Your Business?

A business credit card is absolutely essential to manage and track expenses. Whether you’re a corporate employee who travels to meetings or a small business owner who handles all purchases yourself, you need a business credit card that works as hard as you do.

The bank is quick to offer their credit card to you for your small business when you open a checking or savings account with them. While this is easy to sign up for, don’t assume it’s the best deal.

You need to shop smart for a business credit card. Compare features and benefits and be a bit selfish when it comes to building the credit of your new company. Look for a credit card with no annual fee.

You’re already paying interest on your purchases, so why would you pay a company more just to own the card? You can find a good business credit card deal with no annual fee if you check out the various credit card offers online.

Think of how your business credit card is used. If you regularly charge travel or office supply expenses, then you want a low APR. That’s the Annual Percentage Rate - or the amount of interest you pay on the outstanding balance.

For businesses that consistently keep monthly balances, every percentage point saved is money back in your favor instead of paying more to the credit card company. Credit card companies want your business account, so they offer even more than good rates - they offer bonuses!

A popular company credit card bonus is airline travel rewards. You earn points based on qualified purchases for airfare, hotels, rental cars, office equipment or computers. These points can be redeemed for gifts, restaurant meals or travel.

For a corporation or small business whose employees travel regularly, the points add up fast to pay for part of the next round of business travel. If your business travel is predominately on one airline, you can get a credit card sponsored by that airline. These cards tend to build up mileage rewards even faster.

Some credit cards offer cash back bonuses. This is more costly to the credit card company, so don’t be surprised to find that cash back credit cards also have an annual fee that ranges from $25 to $100.

Unless your business uses the card enough to get back more cash that what you pay out for the annual fee, then this card may not be your best deal. Small businesses will find what corporate managers already know - that a business credit card is an excellent way to keep track of business expenses - including travel and client entertainment.

Some credit cards provide detailed expense reporting, which delights the accounting department. Once the business qualifies for the business or corporate credit card, additional cards can be obtained for new employees.
As the business proves itself by regularly paying at least the monthly minimum payment, the credit limits will increase.

For a new business, a credit card is a great way to establish credit that will come in handy for expansion costs in the future.

Choose Your Credit Card Wisely

Research is extremely important when you start out to apply for a credit card. The one you choose however, should reflect your lifestyle and your ideal spending amounts. If you are looking for the best possible deal and the best credit card company for your card, you must research the various options available to you as a beginner credit card.

The first thing you'll need to decide, when choosing your card, is the reason why you need one in the first place. Some people choose to get a credit card for cash flow purposes. With a credit card, you can make purchases and buy things, leaving your paycheck or other source of income in your bank account to draw interest. This way, your money will continue to grow while you continue to buy the things you need. Then at the end of the month, simply pay your credit card bill.

Others will choose to get a credit card and use it for instant cash purposes. This way, they can use their credit card at an ATM and get instant cash, which is great for travel or going on a long and extended vacation. If this is why you want a credit card, you should look for one that has the lowest rate possible for instant cash transactions.

With a credit card, you'll also need to think about the payments. You'll need to decide if you want to pay the balance in full each month, or only the required amount. When you select your credit card, you should look at the introductory rates, balance transfer rates, and other offers that may apply to new credit cards and new holders. Some will offer you truly amazing deals, especially if you have good credit.


Another important area to look at when choosing your credit card is the incentives. There are several cards out there that will give you incentives, such as reward points and even cash back with purchases that you can use towards paying back what you owe. There are several incentives out there with credit cards, all you have to do is look around and compare.

The key area you'll need to look at and compare is the APR (Annual Percentage Rate). The APR is what you will pay on what you purchase when the incentive period runs out. APR rates will vary among credit cards, so it is always in your best interest to compare and shop around. The lower APR rate you get, the better off you'll be.

Another important concern with choosing your credit card, is the minimum payment amount. Most minimum payment balances will start around 3%, although some can be lower while others tend to be quite a bit higher. The interest free period is a concern as well, as you will obviously want to choose the longest period that you can keep the payments down.

When you make that final decision and choose your credit card, you should always make sure that you know exactly what you are getting.


Credit cards are great to have, use them with insight, and be carefull with your daily spending - bad credit can get you in a world of finanacial trouble. If you put some time and research into choosing your credit card, you'll find the best one for you. As long as you take care of your credit card expences and pay the bill on time, you'll help raise your credit and eventually be able to purchase even bigger things - such as a car or even a house.