Credit Card Billing Statements

Minimum monthly payment• The lowest amount you are required to pay each month • Paying just the minimum amount does very little to reduce the

amount owed• Paying more than the minimum helps reduce the amount of

interest owed on the card• Excess payment must be applied to higher-rate balances first

Periodic interest rate • APR divided by 365 days • The daily periodic rate is used to calculate your daily and

monthly interest charge

Payment due date

• The last day that payment can be accepted without penalty, generally 25-30 days after the close of the billing cycle

• Due dates must fall on the same day every month • If payment is not received by 5:00 on the due date, a late fee

will be charged

Dispute rights• If you find a mistake on your bill, you can formally dispute the

charge• You do this by notifying the credit card company• You can dispute charges for• The wrong amount• Something you didn’t accept• An item or service that was not delivered

Credit Card Fees

Annual fees• Annual fees are common on charge cards, “rewards” and

airline miles credit cards• Sometimes an annual fee will be applied if you do not make at

least a few charges during the year

Annual fee tips • Consider the overall value of a card when comparing fee and

no-fee cards• For cards with airline miles or other rewards, make sure the

card’s benefits and services are worth the price of the fee

Balance transfer fee • Charge for transferring a balance from another credit card• Commonly assessed as a percentage of the transferred

amount (for example, 3%)

Balance transfer tips• When applying for a new card, ask about balance transfer fees• Most companies don’t charge balance transfer fees to new

cardholders for the first month or two

Cash advance fee • Commonly charged as a percentage of the cash advance (for

example, 3%)• Minimum charges are common• A maximum charge may limit the amount paid, but these are

not as common as minimum charges

Cash advance tips• Cash advance fees are an expensive way to get cash – not only

do you pay the percentage fee, but interest on cash advances begins to accrue immediately

• Instead, use your ATM or debit card to withdraw cash from your checking or savings account at your own bank’s ATMs or point-of-sale terminals

Currency conversion fee • Fees charged for purchases made overseas, or purchases

made from companies based outside the U.S.• Also called a foreign exchange fee or surcharge• Fees vary by issuer

Currency conversion fees tip • Before traveling outside of the U.S., shop around to find a card

with a low, or no, currency conversion fee

Late fees• Charged if your payment is late• Payments received on the due date before 5 p.m. cannot be

considered late• Your due date must fall on the same day each month

Late fee tips • Always pay bills on time• Allow at least seven days for the payment to reach issuer if

using the U.S. Postal Service• Consider online bill pay, pay-by-phone, online payments at the

issuer’s web site, or automatic payments from bank account• Try to avoid waiting until the last minute--you can be charged a

fee if you need to make an expedited payment with the help of a customer service rep

Over credit limit fee• Charged if you go over your credit limit AND you have given

permission to the card issuer to charge a fee if you exceed your credit limit

• Only one over-limit fee allowed per billing cycle• If you don’t give permission, you don’t get fee AND transactions

that would push you over limit are likely to be declined

Credit limit tips • Know your credit limit• Keep your credit in good shape by accessing no more than

50% of your credit limit at any time• Call card issuer in advance when an increase in your credit

limit is needed• Ask if issuer has free e-mail alerts to warn when you are

approaching your credit limit

You Task• Watch the video, “The Card Game”• Complete “The Card Game” Worksheet as you watch the

video.