Whether you use credit cards daily or for emergencies – it is essential to check your credit card statement. It comprises several details related to the available credit amount, utilised credit limit, unutilised credit limit, etc. While knowing these details is necessary, you must also not miss out on checking its due dates. It is because non-payment of the dues within the payment due date impacts your credit score adversely.
The debit (DR) and credit (CR) column in a credit card bill list out all transactions made with the card in that particular billing cycle. The credit limit utilised for purchases and charges incurred, if any, falls under the debit (DR) column of this statement. On the other hand, repayments made towards your outstanding credit limit fall under the credit (CR) column of this statement.
Understanding credit card statement – The various components
- Billing cycle
A billing cycle is a period that falls between two bills issued against the usage of credit cards. It is determined by your card issuer and is usually of 30 days. You can receive your credit card statement physically or via email as per your choice.
- Payment due date
You need to settle the outstanding amount every month within a given date fixed by your card issuer. It is known as the payment due date. Card issuers like Bajaj Finserv provide a grace period of up to 20 days between the bill generation date and payment due date with their Bajaj Finserv RBL Bank SuperCard.
If you use your card wisely, i.e. make purchases at the beginning of your card’s billing cycle, you can enjoy an interest-free period of up to 50 days. It includes 30 days of your card’s billing cycle and the next 20 days of grace period.
- Minimum amount due
Minimum amount due is the lowest payment you can make against your credit card’s bill. The minimum payment amount is mentioned in your statement and should be paid before the payment due date. Paying the minimum due amount will carry forward the entire outstanding dues to the next billing cycle. It may also impact your CIBIL score negatively.
- Total amount due
It is a sum of total purchases you have made with your card in a particular billing cycle. You need to pay off the total amount due before the payment due date to avoid incurring additional interest on the same.
- Total credit limit
It is the pre-sanctioned limit with which the lender issues a credit card. It is the allowed limit beyond which you cannot utilise the card to make purchases. It is mentioned separately on the bill.
- Utilised credit limit
It is a part of the total credit limit that has already been used by you for purchases and withdrawals but is yet to be repaid.
- Unutilised credit limit
The unutilised credit limit is the amount which you can use to make purchases. Once you repay your dues, this automatically increases. The increase is equal to the amount paid by you.
- Opening and closing balance
These balances are mentioned in the debit column and show the amount you owed to your lender at the beginning and the end of your billing cycle.
While knowing these amounts and balances is essential, you must not fail to make payment within the due date as it will attract penalties and also reflect on your CIBIL report. Thus, it is advisable to know how to use a credit card to improve your credit score.
Besides, when availing one, look for lenders like Bajaj Finserv who offer less stringent rules on their credit card policies.
They also bring you pre-approved offers on credit cards and loans that make procuring them quick and hassle-free. These pre-approved offers are applicable on credit cards, personal loans, business loans, home loans, and on numerous other financial products as well. You can check out your pre-approved offer by sharing a few necessary details like your name and contact number.
Once you have availed the card, you must learn how to read your credit card statement correctly to eliminate confusions.