Understanding a Credit Card Statement

We were going to put together an article that explains everything you need to know about a credit card statement. However, in the process of researching we found their already to be an excellent article in this area!

Check out the link to this article by thebalance.com on understanding credit card statements! https://www.thebalance.com/how-to-understand-your-credit-card-billing-statement-960246

The only important item the article from thebalance.com leaves out is the concept of the “grace period”. The grace period is the time between the end of your credit card’s billing cycle and the due date for that billing cycle. This is typically about 21 days.  As long as you pay off your card’s balance by the due date then you will not experience any finance/interest charges. If you do not pay off your balance in full by the due date then you will immediately be charged finance/interest charges. These charges will continue until you have paid your balance of in full. The interest rates are steep on credit cards. Sometimes almost 30% so make sure and pay that balance off completely if at all possible!

Make sure that before you apply for a credit card it includes a grace period for purchases! Be aware that even if a credit card includes a grace period for purchases there still might not be a grace period for cash advances and balance transfers.

As always remember the rule of thumb for using credit cards! Before using a credit card make sure you have 1) a written budget, 2) you are tracking your expenses to ensure your budget is being implemented and is realistic and 3) Spend multiple months getting comfortable with steps 1 and 2 before getting a credit card.

If you would like to read more on credit cards check out these two recent articles we recently posted “Don’t Trust The Card or Yourself Without a Plan” and “The Process for Getting a Credit Card”

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