First-time credit card user? 6 things to look out for on a credit card statement

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In addition to spotting errors in your name, address, and transactions made, you should also look for any unauthorized charges, due dates, billing errors, etc. on the statement before paying the bill.

At the end of each billing period, banks send an account statement to credit card holders. The statement summarizes the use of a card during the given time period, but if you are new to credit cards, you may have a hard time understanding the details of the statement. It is important that credit card users understand the fine print of the statement so that they do not get overcharged by the bank or end up with more debt. In addition to spotting errors in your name, address, and transactions made, you should also look for any unauthorized charges, due dates, billing errors, etc. on the statement before paying the bill.

Here are the 6 things you need to watch out for:

Date of succession : This is when your credit card statement is generated and used in the late payment charge calculation. In the event of failure to pay your contribution, the bank will charge you interest and this interest will be calculated taking into account the date of your statement.

Payment deadline: If you want to avoid unnecessary interest charges, keep track of the “payment due date”. This is the date when your bank looks forward to receiving payment of the billed amount at no additional cost. A credit card user is advised to avoid postponing payment as there might be a time lag between the date and time of the payment being made and the lender receiving the payment.

Billing cycle: This period is essentially the period between two consecutive statement dates, which is generally 30 days. A billing cycle is a period for which the statement is generated. All transactions made with the credit card during the billing period will be reflected on the statement. If an interest penalty or late charge is charged, this will also be reflected in the statement. Any amount received for payment of the invoice or any return on failed transactions will also be presented.

Grace period : According to RBI rules, banks can impose late payment fees on a card if the amount owed is not paid more than 3 days from the payment due date. In the event of non-payment within the grace period, the bank is free to charge interest and payment will be calculated from the due date.

Total amount due: It represents the total amount owed during a billing cycle period. In addition to transactions made during the previous billing cycle, the total amount due will also include applicable interest or late payment charges, annual fees, service charges, and other transaction fees.

Minimum amount due: This is the minimum amount that the credit card holder must pay on their invoice on the payment due date. This amount is paid to avoid having to pay late fees, which are a percentage of the unpaid amount (usually 5 percent) that must be paid.

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