Credit card statements

What this guide covers

• Important points on your credit card statement
• Checking your monthly statement
• Estimated interest
• The minimum payment

Important points on your credit card statement

Your monthly credit card statement includes information about transactions made that month, the amount you owe, any interest owing on the outstanding balance and the minimum repayment required.

Nowadays, Online Card Services means credit card companies like MBNA offer you the option to view statements online instead of, or as well as, a paper statement. Compare credit cards for the Online Card Services features they offer. Here are the important bits:

• Outstanding balance - this is how much you owe in total
• Minimum payment - the minimum contractual payment you must make that month
• Payment due date - the date by which your credit card company must receive the minimum repayment. If you miss this date you will probably incur a charge
• APR – the annual percentage rate shows how much borrowing on your credit card will cost
• Interest rates - the interest rates for different types of borrowing. For example, for making purchases and withdrawing money from a cash machine
• Allocation of payments - this is the order your payments are used to reduce or pay off different kinds of borrowing and different parts of the total outstanding balance. Different types of transactions and different parts of the outstanding balance incur different levels of interest, so it’s important you understand what part of the outstanding balance will be paid off first when you make a payment.

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Checking your monthly statement

Always check your statement thoroughly every month against your receipts for items you didn’t purchase, have no knowledge of, or which have been debited incorrectly. Your monthly statement is a useful reminder of Terms & Conditions, telling you the minimum payment required and its due date. The statement also tells you the full balance owing when the statement was issued. It may also tell you about any changes to interest rates or charging methods.

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Estimated interest

Every month your statement also gives you a clear idea of what the estimated interest charge will be next month if you make only the minimum payment in the current month. This is effectively the maximum amount of interest you could incur on the following month’s statement if you don’t use your card again, and gives you a useful guide to the cost of borrowing on your card.

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The minimum payment

The minimum payment is NOT a suggested payment. It is a contractual minimum. If you only pay the minimum payment it could take you a long time to pay off your balance in full. We therefore recommend you pay more than the minimum payment. It gives you the flexibility to choose how much you borrow and how much you pay back. With most cards you can set up a Direct Debit to pay off the minimum repayment each month automatically. This will ensure you always avoid incurring a late payment fee.

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