When a borrower accepts a credit card, the bank sends the borrower a credit card statement each billing period. The credit card statement lists all the transactions that the borrower makes during the period, including withdrawals and payments. It also includes additional finance charges and fees, and provides instructions that explain how much the borrower must pay and where the borrower must send the payment.
The account history section includes the credit card transactions during the billing period. If the credit card owner makes purchases, the transaction value is positive. When the credit card owner repays the bank, the value is negative. The account history only includes direct charges when the owner uses the card to spend money; it does not include interest charges or other fees. On a credit card statement, the account history only shows transactions during the current billing period, not earlier charges or payments.
A credit card owner can dispute transactions on the statement. The user has 60 days after receipt of the statement to contest any charges on it, according to the U.S. Treasury. If the credit card owner believes a charge is not valid, the credit card owner can refuse to pay both the invalid charge itself, and additional interest expenses specifically for the charge.
The bank is normally required to send the credit card statement to the account owner. It is the responsibility of the account owner to provide a current address to the bank. According to the U.S. Treasury, a bank does not have to send out a statement if the account owner owes less than a dollar on the account, or the bank has already started the collections process on a delinquent account.
The bank has to include changes in the credit card contract on the credit card statement. According to the U.S. Federal Reserve, the bank must give 45 days notice for most changes, such as an increase on the interest rate for the card, or a change in other fees such as annual fees or late fees. A billing period is usually a month or less, so the bank usually gives notice several statements in advance before its policy changes take effect.
A bank must include a balance summary on the credit card statement. The bank lists the previous period's balance and the change in balance for the current month. Other fees, such as interest charges and yearly usage fees, show up in the balance summary section.
The payment information section lists the total balance on the credit card, as well as the required minimum payment. According to the Federal Reserve, the payment information section must specify the amount of time it will take the borrower to pay off the debt by making the minimum payment without spending additional money on the card. The statement also displays the size of the payment the borrower needs to make each billing period to pay off the debt in three years.
- U.S. Federal Reserve: Reading Your Statement
- U.S. Treasury: Answers About Credit Cards
- U.S. Federal Reserve: New Credit Card Rules Effective Feb. 22
- Consumer Financial Protection Bureau. "Regulation Z § 1026.5 General Disclosure Requirements." Accessed Nov. 30, 2019.
- Wells Fargo. "How to Read Your Credit Card Statement." Accessed Nov. 30, 2019.
- Federal Trade Commission. "Credit Card Accountability Responsibility and Disclosure Act of 2009 Sec C. 171. Limits on Interest Rate, Fee, and Finance Charge Increases Applicable to Outstanding Balances." Accessed Nov. 30, 2019.
- Discover. "What Does It Mean When My Credit Card Payment is Past Due?" Accessed Nov. 30, 2019.
- Legal Information Institute. “15 U.S. Code § 1681c. Requirements Relating to Information Contained in Consumer Reports.” Accessed Nov. 30, 2019.
- Federal Trade Commission. "Credit Card Accountability Responsibility and Disclosure Act of 2009 Sec. 201. Payoff Timing Disclosures." Accessed Nov. 30, 2019.
- Federal Trade Commission. "Credit Card Accountability Responsibility and Disclosure Act of 2009 Sec. 101 Protection of Credit Cardholders." Accessed Nov. 30, 2019.
- Consumer Financial Protection Bureau. "Regulation Z § 1026.7 Periodic Statement." Accessed Nov. 30, 2019.
Eric Novinson has written articles on Daily Kos, his own blog and various other websites since 2006. He holds a Bachelor of Science in business administration from Humboldt State University.