How to Understand Credit Card Bills

Step-by-Step Guide

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   Step 1: Consider what a credit card statement is.

   In simplest terms, your credit card statement provides a summary of what you’ve done with your card for a specified billing period.
   
   Any transactions or changes regarding your account will be included.
   
   Note that the specific days of the billing period will always be included.
   
   For instance, any purchases or other transaction after the final day of the billing period will be on the following credit card statement., In other words, your credit card statement will help you keep track of your debt.
   
   All of the terms, numbers, and percentages on your bill are listed because they all affect your total credit card balance.
   
   With each credit card statement, you’ll likely have a new balance.
   
   This is true even if you did not make any transactions with your card, as interest is accruing on the money you already owe the credit card company., Your “available credit” is the amount of money you can charge to the card without incurring penalties.
   
   This will directly reflect your total credit balance.
   
   Your available credit is found by subtracting the amount you already owe from your credit limit., You pay your credit card company for the opportunity to borrow and spend money.
   
   The amount you pay is determined by the interest, often referred to as the annual percentage rate.
   
   In simplest terms, you pay back the amount you borrow, plus a percentage (your interest rate) of the amount you borrow for each year you carry the debt.Interest is added monthly for each month you maintain a positive credit balance, or each month you owe the credit card company.
   
   For instance, if you borrow $100 on a 20% annual interest rate, you’ll ultimately have to pay the credit card company $120.
   
   This includes a return of the amount you borrowed, plus the cost for borrowing it.
   
   This cost is determined by the interest rate you agree to when you set up your account.
   
   This is an oversimplified scenario that assumes you paid back the full amount in one year, and made monthly payments on time.
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   Step 2: Keep track of your total credit card balance.

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   Step 3: Monitor your available credit.

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   Step 4: Understand how interest works.

Detailed Guide

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