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What Is a Billing Statement? Definition, Key Details, How To Read

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Updated July 18, 2024

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What Is a Billing Statement?

A billing statement is a monthly report that credit card companies issue to credit card customers showing their recent transactions, minimum payment due, and other relevant information. Billing statements are typically issued at the end of each monthly billing cycle and cardholders can receive them by mail or online.

Key Takeaways

Billing statements show credit card users how much they owe, their minimum monthly payment, and when it is due.
Billing statements list any transactions that have occurred since the previous billing statement.
A billing statement also shows the interest the card issuer charged on the account that month, along with any other fees.

How Billing Statements Work

Like the credit card industry itself, credit card billing statements are subject to a number of federal and state laws.

For example, the credit card company must make sure that the statement is delivered at least 21 days before the payment due date. If the cardholder makes at least their minimum monthly payment within that time frame, it cannot be counted as late.

The statement must also provide a warning that if they make only the minimum payment due they will pay more interest overall, and it will take them longer to pay off their account balance. That information has to be presented in the form of a table, showing the potential savings in both time and money of paying more than the minimum.

What's in a Monthly Billing Statement?

Billing statements following fairly standardized formats and can run for one or more pages. They're usually divided into several discrete sections.

Some of the most pertinent information—the total balance on the credit card, the minimum payment that's due, and the deadline for paying it—will appear near the top.

Another section will provide an account summary. It shows the card's previous balance, recent payments and credits (how much money the cardholder paid toward their previous balance plus any refunds from merchants), the total dollar amount of new purchases during the billing cycle that just ended, any balance transfers or cash advances within that period, the fees and interest charged by the card issuer, and the new total balance on the card, same as indicated up top.

Different interest rates can apply to different types of card transactions, such as purchases versus cash advances or balance transfers. Those details may be provided in a separate section on interest charges, whether you've incurred them that month or not.

The billing statement will also show all of the transactions that have happened since the previous billing statement, listed by date. These "account activity" listings will show the date, payee name, their address, and the amount charged to the card. They will sometimes include other details. For airline tickets, for example, they may indicate the departure and arrival cities.

The billing statement should also include customer service contact information, along with fine print about the account and the cardholder's various rights, including how to dispute possible errors and how to initiate a chargeback if they found the goods or services they were charged for to be unsatisfactory.

Note

For cardholders who pay their credit card bills by mail, the billing statement may also include a tear-off slip that the person can return with their check.

Finally, if the card pays points, airline miles, or other rewards, the statement may show much the cardholder has earned since their last statement and what their current rewards balance is.

Frequently Asked Questions (FAQs)

How Long Should You Keep Your Billing Statements for Tax Purposes?

If your billing statements contain information relevant to your taxes you should usually keep them for at least three years. That's how long the Internal Revenue Service generally has to question items on your return (unless you've committed tax fraud, which has no statute of limitations). Examples of billing statement items that might be relevant for tax purposes include medical expenses, charitable donations, real estate and other taxes, and any expenses you incurred in running your own business.

How Do Chargebacks Work?

A chargeback allows you to withhold payment for goods or services you found to be unsatisfactory or that you never received at all. While you should generally complain to the merchant first, if that fails you can ask your credit card issuer to have the charge reversed. There are a number of requirements you'll have to meet, such as the purchase must have been for at least $50 and must have been made in your home state or within 100 miles of your home address. This is one of the advantages of credit cards over debit cards; when you pay with a debit card the money comes out of your account tight away, making it much more difficult to recoup. although you can attempt chargebacks with debit cards, too

What Is a Balance Transfer?

A balance transfer involves moving the current balance (or some portion of it) from an existing credit card to a new one. The incentive might be a lower interest rate on the new card, some of which even charge 0% interest for a certain promotional period. Card issuers generally charge fees for balance transfers and the interest rates they impose on them may be higher than on new purchases.

What Is a Cash Advance on a Credit Card?

In addition to making purchases with a credit card, you can obtain cash from it, in the form of a cash advance. Cash advances can be expensive, however, typically incurring fees, as well as a higher interest rate than purchases. What's more, they generally have no grace period whatsoever and start accruing interest from day one.

The Bottom Line

Your credit card billing statement provides information beyond the basics of how much you owe. It's worth reviewing your statement each month for any errors and so that you know what your card is costing you. A billing statement (or a year's worth of them) can also be useful as a budgeting tool, since it records many of your expenses, some of which you might easily forget about.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

Consumer Compliance Outlook. "An Overview of the Regulation Z Rules Implementing the CARD Act."
Internal Revenue Service. "How Long Should I Keep Records?"
Consumer Financial Protection Bureau. "How Can I Get a Refund on a Product or Service I Purchased With My Credit Card?"

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