CREDIT CARD STATEMENTS - NEW AND IMPROVED! (Mostly)

If you get a monthly bill from your credit card company, you may have noticed some recent changes. I found that my clean and clear statement from Chase has become cluttered and confusing. However, on second look there are gems hidden in all that text. As a friend pointed out, this new information is similar to the nutrition labels on our food packages. At first I thought those labels were ugly and of marginal value; now I read them on a regular basis.

Did you notice the block that says how long it will take you to pay off this account if you pay just the minimum? I received a bill from Macy’s this week for $61. It would take me 20 months to pay it off if I sent them just the $5 that they ask for each month. (And cost me $99.) Just imagine the time frame if my balance was over $1,000 and I paid the minimum! Also noteworthy is the box that offers an alternative scenario - how soon the debt will be paid if you set a different payment amount. Know that this box is just an illustration - you can always pay as much as you are able.

The most important piece of information on your statement is the interest rate you are paying on any outstanding balance. This is not new information and in fact it may be harder to find than it was, but it tells you the cost of the money you have borrowed. Just as you checked the cost of the item before you bought it, you’ll want to stay aware of how much your debt costs every month.

So take a moment and get familiar with your new credit card statement. Some very useful information is tucked in there including how much your debt costs and how quickly it can be gone.