A guide to understanding the credit card billing statement

A statement released by the RBI reveals that spending under the credit card portfolio in June 2020 was 42,818 crore which was much lower than the expenditure in January (Rs. 67000 crores). The current economic impasse is one cause behind this sudden drop in expending. Moreover, a lack of understanding of one’s credit card statement can also discourage new cardholders from using these cards for expenses.

A credit card statement refers to a summary of all expenses on such cards in a particular billing cycle. credit card bill payment is sent monthly by a financial institution to update cardholders about their accrued dues. It is mandatory to check this summary thoroughly to spot any unauthorized transaction.

The contents of a credit card statement
Apart from providing detailed information about transactions made during a specific billing period, a credit card statement also includes other data. It is therefore essential to understand related terms and how to read your credit card statement correctly.

Credit limit
A credit card comes with a pre-determined limit which is mentioned on your credit card bill. This spending limit is based on a borrower's income, credit rating, loan repayment history, and others.
When a person transacts using his/her credit card, the credit limit decreases by the exact amount as that of expenses. A credit card statement shows this revised credit limit at the end of the year. If borrowers pay their bills timely and do not max out their credit limits, they can even apply for a credit increase. Availing a credit card and understanding the credit limit helps a person maintain the balance between expenditure and smart saving.

Outstanding balance
The outstanding balance on credit cards is the total amount of money a user owns to the card issuer. This balance is usually calculated after considering one’s credit card expenses in a previous month.
It usually includes three components, including your accrued amount, outstanding interest, and principal payments to clear your dues. Your credit card bill shows the current outstanding balance to indicate the needed payment. An individual can pay his/her credit card bill through net banking or cheque to prevent interest charges.

Minimum payment due
Credit card issuers provide a minimum payment due amount on a statement as well. This disclosure cautions a credit card owner to pay off the minimum balance to avoid accruing interest.
One can even find the total amount needed to pay and the interest charges when just these minimum payments have been made in the credit card statement. Failing to clear dues each month, forces borrowers to pay substantial interest.

Payment due date
The payment due date is the date by which a credit card owner needs to pay his outstanding amount each month. This payment due date is generally set within 21 to 25 days since one’s last bill was generated. A person can pay an outstanding amount before this due date but missing it can add penalty fees and additional charges.

A Bajaj Finserv RBL Bank SuperCard can assist users by offering interest-free periods on cash withdrawals and loans against card limits. Such offers can minimize one’s liabilities further.
This NBFC also provides pre-approved offers to simplify credit card applications. Such offers are available on products like personal loans, business loans,s, etc as well. You can check your pre-approved offers by providing your name and contact number.

Reward points gained
Credit card statement carries details regarding reward points accumulated with different credit card transactions. Reward points earned can be checked under a section named ‘opening reward point’ and ‘closing reward point’ section in the credit card bill at the onset of the billing cycle and when it ends. Users can also check the number of reward points that have been earned and redeemed within the billing period.

These are some of the vital elements in a credit card billing statement, which are essential to understand. Misleading data or information can lead a cardholder to unwanted debts and accrued interest. Therefore, choose a credit card wisely and pay the balance amount timely while keeping track of the statement.

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