When it comes to financial literacy, having a basic understanding of credit card statements is essential. Many people are unaware of the many positive benefits that come with proper understanding of credit card statements. Not only can you manage and optimize your credit utilization to build credit history, but you can also track charges more efficiently and reduce the risk of fraudulent activity.

The primary purpose of a credit card statement is to present an itemized list of your past credit card purchases and payments. It will specify the amount of each transaction usually with the name of the merchant and a brief description of the purchase as well as the date of the transaction. All credit card statements will also feature an account summary of your open balance, recent payments, total credit limit, and any relevant fees associated with the credit card.

The biggest benefit of a credit card statement is that it helps you stay in control of your finances and be aware of where you stand financially. With this information in hand you can plan out a budget more easily and make more informed decisions. Knowing what you have paid and how much money you still owe helps you prioritize which bills to pay first and still have enough money to cover all your expenses. For those struggling with overspending, a credit card statement can be a helpful flag for when to dial back spending.

It is also important to check your credit card statements for any fraudulent activity, as well as any errors in the account summary. Fraudulent activities can include purchases for products or services you didn't make or recognize, or an inordinate amount of charges. Sometimes fuel charges are recorded differently on statements than on the pump card, so keep an eye out for discrepancies. To help detect fraudulent activity, you can also review the charges on each statement against the ones listed on your online account each time you receive your credit card statement. This helps protect your credit score and credit history, and prevents you from making payments on something you don’t owe.

Overall, understanding credit card statement provide many positive benefits that allow individuals to have better control of their finances. Not only does it help you categorize and track all of your charges, but it also helps you prevent and detect fraudulent activity as you stay up to date on your credit utilization ratio. Not to mention, the convenience of these statements is easily accessible for viewing your monthly charges so you can keep better track of where you stand financially.