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You receive a statement every month reflecting the transactions on your credit card account. Your billing statement is a complete record of your account activity during the past month. Your statement is in two parts, separated by a perforation. The upper (also lower in some cases) smaller portion is the payment coupon, which you can enclose with your payments. The lower portion lists out the transactions on your credit card. When was the last time you read through your credit card bill? How confused were you by the time you finished? Here’s what to look in your statement.

• Your name & address: This is your name and address as per Bank’s records and you need to notify bank in writing if there is any change as soon as possible.
• Reference number: you should quote this number when you have a query on any charge listed on your statement.
• Your Card number: Please write on your cheque/draft when making payments, or any correspondence. You should also write your name and contact number on the back of the cheque / DD as it gives the collections agency a chance to get in touch with you in case there are any problems with the instrument.
• Statement period: This is the period for which charges incurred on your card are listed in the statement.
• Statement Date: This indicates the date on which your billing statement was generated.
• Payment Due date: To maintain a good payment history, please make sure that payment reaches the bank before this specified date.
• Total Amount Due: This is the total unpaid accumulated amount outstanding in your account.
• Minimum Amount Due: This is the minimum amount you are required to pay to keep your account in a good credit standing. This amount is 5% of your Total Amount Due.
• Annual Percentage Rate (APR): The Annual Percentage Rate (APR) is the yearly interest rate or percentage rate that you pay on an outstanding balance in the form of interest. Interest is charged as a percentage of your outstanding balance (purchases and charges reduced by payments or credits posted).
• Payment Details: When making payments please indicate the following details in the assigned boxes on the payment coupon:
         1 Cheque number
         2 Cheque date
         3 Cheque amount
         4 Bank & Branch on which the bill is drawn
• You need to detach the payment coupon and send it along with your payment.
• Credit Limit: A credit limit is the maximum amount of credit that a bank or other lender or the maximum that a credit card company will allow a card holder to borrow on a single card.
• Available Credit Limit: This is the difference between your credit limit and the total amount due.
• Available cash Limit: This is the amount of cash you may actually withdraw as of your statement date, and is the difference between your cash limit and the amount of cash you have already withdrawn (subject to your available credit limit).
• Previous Balance: This is a one-glance account summary of the current financial status of your card account as of the statement date. OTHER CHARGES include:
          1 Renewal Fees
          2 Penal Charges for dishonored cheques
          3 Service Charges
• Sale Date: This refers to actual date of purchase on you card.
• Amount: This lists the corresponding amount against each purchase or cash advance or any other charge.
• Rewards Summary: This is the record of the rewards points you have earned/ redeemed. Above explained are the points that are visible on your credit card statement, but there are various other Key points you need to be aware of.
In the Bank’s terminology any credit card holder can be one of the following:
• Transactor
• Revolver
• Defaulter
Transactor is a person who makes 100% payment for his credit dues every time as per his credit card statement, i.e. the previous balance for every next statement is NIL and the Total Amount Due is paid by the cardholder before the due date.
Revolver is a cardholder who pays between 5% or 99% of the Total Amount Due (Minimum Amount Due is 5% of the Total Amount Due).
Defaulter is a person who does not pay even the Minimum Amount Due as per his credit card statement.
Let’s take a hypothetical example:
From the given diagram, we have made an attempt to explain you that how do banks bill your transactions.
The above example explains the type of customer who pays more than his Minimum Amount Due and less than Total Amount Due. This type of customer is called a REVOLVER. And a bank earns the maximum from a revolver.

If, as per the above example the credit card holder pays the Total Amount Due (Rs.13, 000) after 25th January and before 10th January (due date) then the card holder will be called TRANSACTOR, because he is enjoying the maximum credit period with no additional interest cost.

And if the card holder pays after the due date, then he is liable to pay the following:
• Late Payment Charges
• Default Charges
• Processing Fee
• Service Tax
• APR
And all of these are payable from the date of transaction and also on the full amount of the transaction. This category of card holder is termed as a DEFAULTER.

A person can be a transactor in one month and a revolver in the next and a defaulter in the month after. It is a function of the payment made for that monthly cycle.

Some Tips On how you should plan your transaction to pay less on your credit card bills:
• Firstly know the billing cycle of the credit card you are holding. Eg. If your billing cycle is from 1st to 30th of every month and you get a GRACE PERIOD of 15 days then your due date comes out to be 15th of the next month.
• After this you need to plan your purchases accordingly, only then you will be able enjoy the maximum interest free credit period. Eg. If your cycle is like the given above then you should plan your purchases from 1st to 10th of every month to be a smart customer.
• You not only need to plan your purchases early, but also you need to plan purchases involving heavy expenditures earliest of all other transactions. This is because banks knock off the transactions as they have occurred as per their records. Therefore, when you will make payments then your bigger transactions would be nullified before your other transactions.
• Always remember that banks charge interest on the full amount of the transaction whether is half paid or partly paid, so clear all your dues as early as possible.
• To be a SMART customer you should always pay the Total Amount Due on your credit card statement and that too after your billing cycle but before your due date, that ways you can enjoy the maximum interest free credit period.
• So now I am sure you are aware as to why you have so much interest charged on your credit cards transactions and also how it is charged. I hope from now you can read your statement smartly and use your card more efficiently by remembering

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