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How to Read Credit Card Statements & Balances

Getting a credit card is an exciting milestone in life, just like getting your driver’s license or turning 21. But it can be confusing to navigate your statements and balances, especially if you’re completely new to the process. Keep reading to familiarize yourself with commonly used terminology and to understand just what’s going on when you get your first statement in the mail.

Common terms you should be familiar with before reading your credit card statement:

Account InformationThis includes your credit card number and online login information. The first 6 digits of your card number represent the card issuer and industry of your credit card. The last digit is used to verify the card info.
Your online account information will include a personalized, secure username and password.
Activity SummaryA list of all the purchases made on your credit card during a billing period. You’ll be able to see how much was spent, where, and what kind of transaction it was (i.e. Services, Travel/Entertainment, etc.)
Cashback Rewards/Bonus BalanceCashback rewards are bonuses provided to credit card owners when they use their cards to make purchases. These rewards are either dollars or points. Points are typically redeemable at an online marketplace owned by the card issuer. Cashback rewards can also sometimes be used towards your credit card balance owed.
Days in Billing PeriodThe number of days in between your last statement closing date and the next. According to the CARD Act, billing cycles must be at least 21 days.
Interest Charge CalculationCredit card issuers use a formula to determine the amount of interest you’ll pay on outstanding balances. It’s either calculated daily or monthly, depending on your card. If your interest is based on your average daily balance, your issuer will track your balance day by day. The total number of daily balances is added together at the end of the billing cycle and divided by the number of days in that cycle. That number is your average daily balance.
Minimum Payment DueThe smallest amount of money you owe to keep your account active. Each credit issuer will calculate their minimum payment differently, but $25 is the lowest payment you’ll be charged according to the Consumer Financial Protection Bureau.
New Credit Card Statement BalanceThe most recent sum of all your charges and payments made during your last billing cycle.
Open Date & Closing DateThe open date is the day your credit card billing cycle starts. The closing date is when that cycle ends, and also when your credit card company will send you your monthly statement.
Past DueA payment that has not been made by the due date. You’ll usually owe late fees if this occurs.
Payment CouponA paper slip that includes payment information, such as your card’s statement balance and the due date, and is sent along with a check to pay your credit card bill by mail.
Payment Due DateThe date your credit card statement must be paid. You can usually also pay your balance before the due date.
Revolving Line AvailableA loan offered by a financial institution that allows borrowers to borrow up to their credit limit again without going through another loan approval process after the debt is paid.
Revolving Line of CreditAn agreement that allows an account holder to repeatedly borrow money up to a set dollar limit while repaying a portion of the current balance due in their regular payments.
TransactionsWhen you use your credit card to make a payment for a good or service, the merchant’s bank sends your credit card information for approval. Then the credit card issuer approves and pays, or denies the exchange.

What is a credit card statement?

A credit card statement lists all of the purchases, payments, and other credits and debits made on your credit card account within the billing period. This is sent to you by your credit card issuer about once a month. Pro-tip: review each line item to make sure each transaction is accurate.

What is a credit card statement balance?

A statement balance lists all of the payments and expenses that were made on your credit card account during the billing cycle. This statement does not change until your next billing cycle.

What’s the difference between the statement balance and current balance?

Like we just mentioned, your statement balance will not change until your next billing cycle–but that doesn’t mean your current balance won’t change. The current balance showcases the total amount of all the charges and payments made on your account, which changes every time you use your credit card. For example, if you’ve bought groceries and movie tickets after your statement closing date, then this will appear in your current balance. In this case, your current balance will be higher than your statement balance. But if you’ve paid your credit card bill since your statement closing date and you haven’t made any new purchases, then your current balance will be lower than your statement balance.

How long should you keep credit card statements?

If you receive your statements online, you’ll be able to review them for up to 3 years, depending on the bank. If you still receive your statements in the mail, it’s best to keep the paper copies for at least 12 months.

Frequently Asked QFAQs

When will I get my credit card statement?

Your monthly credit card statement will arrive at the end of your billing cycle. You should see it in your email inbox (if you’ve opted for paperless statements) or a physical copy may arrive in the mail. It’s typically 21 days before your next minimum payment is due.

How do I avoid interest charges?

The best way to avoid paying interest on your credit card charges is by paying your balance in full every month before the end of the grace period. Otherwise, you’ll have to pay an interest fee on top of the money you already owe for the things you’ve bought with your credit card.

Abigail Masterson

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