How to Read Your New Credit Card Bill

Photo by Andres Rueda

The Federal Reserve's new rules for credit card companies mean consumers now enjoy increased protections. Happily, the Credit CARD Act requires credit-card companies make monthly statements easier to read with much useful information. The new statements will help consumers stay better informed and keep a close eye on any changes made by lenders.

Here are some key changes you can expect to see when your next bill drops through the mail slot.

1. Summary of Account Activity
This summary includes all transactions on your account, including payments, credits, purchases, balance transfers, cash advances, fees, interest charges and amounts past due. It'll also show your new balance, available credit (your credit limit minus the amount you owe), and the last day of the billing pe riod (payments or charges after this day will show up on your next bill).

2. Payment Information
Here's where you'll find your total new balance, the minimum amount you can pay and the date your payment is due. A payment generally is considered on time if received by 5 p.m. on the day it is due.

3. Late Payment Warning
This section states any additional fees and higher interest rates you may be charged if your payment is late.

4. Minimum Payment Warning
This new feature will provide an estimate of how long it can take to pay off your credit card balance if you make only the minimum payment each month. It also will include an estimate of how much you likely will pay, including interest, in order to pay off your bill in three years (assuming you have no additional charges). For other estimates of payments and time-frames, see the Federal Reserve's Credit Card Repayment Calculator.

5. Notice of Interest-Rate Changes
If you trigger the penalty rate (for example, by going over your credit limit or paying your bill late), credit-card companies must notify you of any resulting interest-rate increases at least 45 days before your rates change.

6. Other Changes to Account Terms
The lender must notify you at least 45 days in advance if it plans on raising interest rates or fees or making other significant changes to your account.

7. Transactions
A list of all the transactions that have occurred since your last statement (purchases, payments, credits, cash advances, and balance transfers). Some credit card companies group them by type of transactions. Others list them by date of transaction or by user, if there are different users on the account. Review the list carefully to make sure you recognize all the transactions. This is where you can spot any unauthorized charges or other problems.

8. Fees and Interest Charges
Credit card companies must now list fees and interest charges separately on your monthly bill. Interest charges must be listed by type of transaction (for example, you may be charged a different interest rate for purchases than for cash advances).

9. Year-to-date Totals
You can now see the total amount you've paid in fees and interest charges for the current year. You can avoid some fees, such as over-the-limit fees, by managing how much you charge, and by paying on time to avoid late payment fees.

10. Interest Charge Calculation
You'll now see a summary of the interest rates on the different types of transactions, account balances, the amount of each, and the interest charged for each type of transaction.