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Do you use credit card regularly? And if you do, are you aware as to how to read a credit card statement properly? Because even though many individuals are heavy credit card users, they have a very hard time navigating through their own credit card statement. If you are amongst such people, this video is just for you! Let’s decode what is written in your credit card statement and what it actually means.

First off, pay attention to the statement date. This is when your monthly journey with any credit card begins, or when your statement starts generating. Importantly, if there has been any delay in settling previous bills, interest on that will start adding up from this date. That is why knowing your statement date can help your plan your payments in advance, and save you from paying unnecessary interest charges.

The next important term to know about is payment due date. This is the bank’s deadline, till which date you have to make the payment. Between you making the payment and the card company receiving the same, there is a small time window, which is when it is shown as processing. In this case, since the payment does not reflect immediately, if you make the payment right on the due date, it will begin reflecting in the bill only after 24-48 hours.

The next thing to remember is the billing cycle. This generally lasts 30 days, and shows all transactions which can help you track your spending habits. You can accurately make your budget if you keep a close eye on your billing cycle.

The next important part of your credit card statement is the grace period. The window after the billing cycle is over, till the payment due date is known as grace period. In this gap, the company will not levy any interest on your dues. This grace period generally lasts between 21 to 55 days.

Also keep a close eye on transaction details in the credit card statement. This offers a detailed record of all your financial activities, giving you information related to every transaction you’ve made. Once you review it, you will get a fair sense of whether or not any unauthorized transactions have been made from your card.

Next comes the total amount due, which is the sum total of your purchase amount, previous dues, interest and fees.

Up next is the minimum amount due. This is the minimum amount you can pay before or on the payment due date, so that your credit card account is maintained. This forms a small part of your total dues. Usually, this comes to 5% of the total due amount. But this does not mean that you only always pay the minimum due amount. Because, if you keep paying just this minimum amount, your interest payable will keep increasing on the remaining amount.

Now, let’s see how much is credit limit availability. This is the maximum amount or the limit till which you can spend from your credit card. This limit is determined based on your income level, credit score and your payment history on your previous credit cards. Out of your total credit limit, deduct the amount you’ve spent and previous interest payables. Post this, the amount you will be left with will constitute your available credit limit.

Similarly, the available cash limit is the maximum amount you can withdraw from a bank ATM via your credit card. Mostly, banks or card companies offer a cash limit of up to 20-40% of the total credit limit.

Lastly, there’s the reward summary. You earn reward points on every transaction you make via your credit card. You can use these to shop, book flight tickets at discounted prices, and much more. Pay attention to this reward summary, since some points expire every 30-60 days.