MOVED Can You Pay Off 1 Credit Card With Another? It's Complicated

Posted by Lyle Daly on Jan 1, 2020 6:00:00 AM

There's no direct method, but there are a couple of indirect options.

If you have multiple credit cards, you've probably wondered at some point whether you could just use one to pay off the other.

Plenty of consumers ask this question because there would be obvious benefits if the answer was yes. It would be easier to manage when money's tight, and better yet you could earn rewards on one credit card by using it to pay another card's bill.

Woman choosing and removing one credit card from a set of three.

Unfortunately, you can't earn rewards that way. And when you're paying a credit card bill, there's no way to add another credit card as a payment source. There are two potential workarounds -- but only one of them is a good idea.

Balance transfers

If you want to pay one credit card with another, the smart method is a balance transfer. To do this, you'll either need to log in to the online account or call the card issuer of the card you want to use for payment. You'll then provide the card number for the credit card with the balance you wish to transfer over, as well as the amount to transfer.

There are a few things to keep in mind with balance transfers. Not all credit cards offer this option, and among those that do, many charge a small balance transfer fee. Some cards have limits on the amount you can transfer to them. Even if a card doesn't have a balance transfer limit, your transfer amount and any transfer fee can't total more than your credit limit.

Consumers typically use this method to get a lower interest rate on their credit card debt, often opening balance transfer cards that offer 0% introductory APRs for a set period of time. 

If you can't pay your credit card bill in full and you have a good credit score, one of these cards can help you save money on interest. You'll need to make minimum payments, but you won't have interest charges piling up, at least during the card's introductory period.

Cash advances

The alternative route is to get a cash advance on one credit card, and then use the money to pay your other card's bill. Most credit cards offer cash advances, although cash advance limits are usually much lower than the card's total credit limit. You will also need to pay a cash advance fee on any amount borrowed using this method.

The reason why getting a cash advance from your credit card is such a poor decision is the interest. Credit cards have separate cash advance APRs, and these APRs tend to be much higher than the standard purchase APR.

To make it even worse, there's no interest-free grace period with cash advances. For purchases, credit card companies must give you a grace period of 21 days before charging any interest. This is because of the CARD Act of 2009. That law doesn't apply to cash advances, so credit card companies can start charging you interest on those immediately.

It's never a good idea to get a cash advance, and it also doesn't make any sense to use a cash advance to pay another credit card bill. You'd be better off making a minimum payment and carrying the balance on the original card for the time being. You'll pay interest, but at least it will be at the purchase APR and not a higher cash advance APR.

What to do if you can't pay your credit card bill

If you can't pay your entire credit card bill, the right move will depend on the amount you owe.

For credit card debt that you won't be able to repay within about three to six months, a balance transfer is the way to go, assuming you can qualify for a balance transfer card. But if you're confident you can pay off all your credit card debt relatively quickly then it could be best to simply focus on paying it down as fast as you can without transferring the balance.

And while a cash advance may initially seem convenient, the fee and the interest you'll pay mean you should avoid this option at all costs.

Topics: Credit Cards, Balance Transfer

MOVED The 5 Biggest Drawbacks of Having a Lot of Credit Cards

Posted by Lyle Daly on Dec 31, 2019 2:00:00 PM


Having a lot of credit cards has its perks -- but it's not all plane sailing.

With the array of benefits that the best credit cards offer, it's tempting to sign up for every card that you like. More cards mean you can get more sign-up bonuses, earn extra rewards in additional spending categories, and take advantage of even more perks.

That's been my strategy, and at this point, I have over a dozen credit cards. Although you can get substantial value this way, there are also drawbacks to be aware of before you start opening multiple cards per year.

Man having a mental breakdown while clutching two big fistfuls of credit cards to his head.

1. You have more accounts to manage

Every time you add a credit card to your wallet, you make your finances more complicated. You have another bill to pay, which makes a missed payment more likely (although you can mitigate this risk by setting up auto-pay). It's also another account that you need to monitor for fraud.

When you have one or two credit cards, you probably won't have much trouble. But with more, it becomes much more of a challenge to manage all those accounts. Any missed payments or other mistakes can cost you money, too, so you should only take on this kind of responsibility if you know you can handle it.

2. It's harder to get approved for new credit cards

My biggest annoyance with having so many credit cards is that it has become significantly harder to get approved for new ones. Quite a few credit card companies now deny applications because the applicant either has too many credit accounts open already or because they've applied for too many cards recently.

If you're used to getting your applications easily approved because you have a good or excellent credit score, be prepared for that to change as your number of cards increases.

3. You could pay more annual fees

Many of the credit cards with the most perks, and especially the most popular travel cards, carry annual fees. It's easy to justify paying an annual fee for a card if you use it frequently and get a lot of value from it. When you have multiple cards with annual fees, then you need to carefully weigh whether you're using them all enough to make those fees worth it. And even if the answer is yes, it can still get expensive.

4. You need to remember which card to use for each purchase

One advantage of having multiple credit cards is that you can earn more rewards on your purchases. For example, you could combine one card that earns a solid flat rate on all your spending with cards that earn higher bonus rates on specific categories, such as grocery stores, travel, dining, and gas. It's a great way to increase the amount of cash back or travel points you earn.

The downside is that to earn those extra rewards, you'll also need to know which card to use for which bonus category. That can lead to situations where you're standing at the register trying to remember which of your many cards will get you the most rewards.

5. It can affect your credit score

The number of credit cards you have doesn't affect your credit score, but there are still a couple of ways that having lots of credit cards can hurt your credit.

The average length of your credit history is a factor used to calculate your score. If you open several new credit cards, it will decrease that average account history length.

Another factor that impacts your credit score is new credit inquiries, which includes the hard credit inquiries that occur whenever you apply for a credit card. If you apply for several credit cards, you'll have multiple hard inquiries on your credit file, thus bringing down your score.

Tread carefully with credit cards

There's nothing wrong with carrying multiple credit cards, and in fact, it can be a smart strategy for some consumers. But it also means you'll have more risks and complications to deal with, so you should err on the side of caution. Start slow, and if you feel like you can handle more, do it one card at a time.

Topics: Credit Cards, Travel

MOVED 7 Ways to Beat Your Parents' Credit Score

Posted by Elizabeth Aldrich on Dec 31, 2019 8:00:00 AM

Get ahead of the game while you're young, and your credit will thank you.

With age comes more life experience and financial stability⁠ -- which may also mean a higher credit score. The Ascent's study on credit scores in America found that individuals over 60 have an average credit score of 747, which is 88 points higher than adults that fall into the 18-29 age range.

In other words, older Americans are more likely to have very good credit, whereas young adults are more likely to have credit that's considered "fair." After all, people in their 20s haven't had a lot of time to build good credit.

Small child defeating grown man at arm wrestling.

Luckily, with some determination and strategic decision-making, it's possible to obtain good, or even excellent, credit at a young age. Here's how you can increase your credit score and maybe even surpass your parents.

1. Get started as early as possible

Your first goal is to build a lengthy payment history. You can start from scratch by opening a credit card with a cosigner or choose a card that's designed to build credit -- like a student credit card.

If you want to try for a regular credit card, use your current relationships to your advantage. Your local credit union may be willing to approve you for a credit card if you already have a positive, long-standing relationship with them.

You can also explore opening a secured credit card which requires a refundable deposit in exchange for credit. The best secured credit cards require a deposit ranging from $49 to $200 and come with a low credit limit. They can be a great option for someone who has just started their credit-building journey.

Finally, if you're having a hard time getting approved, you may have better luck applying for a store credit card. These are usually easier to qualify for, but they tend to have high interest rates and lousy terms. So treat this route as a last resort and make sure you pay off your balance in full each month to avoid interest.

2. Use your credit card regularly and pay it off every month

You can't build credit by simply carrying a credit card in your name. You have to use it. 

Consider using it to pay for a few of your regular bills each month. This can help you get used to using a credit card without swiping it for things you don't need.

One of the worst things you can do to your credit is miss payments. Set up automatic payments to ensure this doesn't happen, and pay off the full balance whenever possible to avoid interest fees.

3. Carry multiple credit cards

Once you've adjusted to using one credit card responsibly and built up some credit, you can open your next line of credit. Balancing several credit cards at once shows you can manage multiple due dates, which creates a more robust payment history.

You need to be smart about when you apply for credit and how you manage your payments. Stick to one or two applications per year to avoid a negative impact on your score. You can keep track of your payment due dates by setting up notifications with your credit card company and signing up for autopay.

4. Keep a low debt-to-credit ratio

You should use your card regularly, but not enough to max out your credit limit. Always keep your balance low, even if you're paying off the full amount each month. This will help keep your credit utilization low, which is an important component of your credit score.

Essentially, your debt-to-credit ratio -- or your balance(s) in relation to your overall credit limit -- should remain below 30% at all times. If you find yourself hitting your credit limit regularly, request a credit limit increase or consider opening another card. This will decrease your credit utilization, as long as you don't increase your balance.

5. Keep old credit cards open

As your credit score improves, you might find yourself gaining access to more rewarding credit cards. But it's important that you don't close your old credit cards unless they charge an annual fee.

As long as your credit cards aren't costing you anything, keep them open to maintain the length of your credit history and the average age of accounts. Both of these factors play an important role in determining your credit score. It will also keep your overall credit limit high, which helps your credit utilization rate. 

6. Sign up to include your banking and bill payments in your credit score

You no longer have to rely solely on lending information to determine your credit score. Services like UltraFICOTM and Experian Boost can give you alternative ways to boost your credit with existing positive financial data.

UltraFICOTM allows you to choose to include information from your checking and savings account to better demonstrate your financial responsibility. You can also opt in to Experian Boost to allow Experian to access your online banking information and include utility and phone bill payments in your payment history.

7. Go slowly and avoid scams

Building credit takes time. Be wary of  services that claim they can help you immediately or quickly achieve excellent credit without requiring any work on your part. These can be a scam, or at the very least, potentially risky.

You never have to pay money to build your credit. Even though taking out a loan can sometimes help, you shouldn't take on debt that you don't need just to improve your credit score.

Instead, rely on free credit-building methods -- like using credit cards and consistently paying your bills on time. It may take some time, but your diligence will pay off and set you up for future financial success.

Topics: Credit Cards, Cash Back & Rewards

MOVED No Credit? No Problem: Building Credit Has Never Been Easier

Posted by Elizabeth Aldrich on Dec 30, 2019 4:00:00 PM

New credit card companies and ways to boost your score are opening up access to credit.

It can be tricky to get a loan or open a line of credit without a credit history. It's the notorious credit-building Catch-22: You need to access credit to build good credit, but you need to have good credit to access credit.

Folks with no credit will be excited to learn that this maxim may not ring so true anymore. Thanks to new technology, lenders can now draw on additional information like your banking behavior and bill payment history to evaluate you as a potential borrower. This means that you don't necessarily need to show that you've used credit before in order to access credit.

Trio of women in flannels and construction helmets looking at a credit card.

UltraFICOTM and Experian Boost give you credit for paying the bills

Most lenders rely on your FICO® Score to make lending decisions. The problem for many consumers is that there's more to their financial picture than this score alone. And so, new services like UltraFICOTM and Experian Boost have developed algorithms that fill in some of these missing pieces with additional data. 

Both services incorporate data from your bank account to provide a more holistic picture of your habits as a borrower. They make credit opportunities more accessible by expanding the information that determines your credit score. 

UltraFICOTM looks at your checking, savings, and money-market accounts and considers factors like account age, balances, overdrafts, and bill payments. Experian Boost pulls payment information from your bank account for bills like utilities and telecom services, often improving your credit score if your bills are consistently paid on time.

Experian Boost and UltraFICOTM are both free services, which you can opt in to if you want these additional factors to be reflected in your credit score. They may be helpful for consumers with no credit, but they can also help push borderline consumers over the edge into good credit. 

New no-fee credit cards make building credit easier and cheaper

Although the services above can give you a credit boost, they aren't going to catapult you to excellent credit on their own. Getting excellent credit requires a lengthy history of on-time payments.

One of the best ways to do this is by using credit cards strategically.

If you're starting from scratch, secured credit cards have long been the way to go. These low-limit credit cards are easy to qualify for, and will help you build a payment history. You'll need to provide a refundable security deposit of anywhere from $50 to $500. 

Secured credit cards are a great starting point, but they are limited due to their security deposit requirements, low credit limits, and lack of benefits or rewards. They aren't meant to be a long-term solution -- you'll eventually want to transition to an unsecured credit card with a higher credit limit.

The great news is that  secured cards are no longer the only option for consumers who need to build their credit. New credit card companies are popping up that look at alternative data (information outside of your credit score) in order to approve consumers for starter credit cards. In fact, several of the new cards geared toward consumers with no credit are even better than secured credit cards. They come with no annual fee, no security deposit requirement, and upfront terms. Some even offer rewards.

Although building your credit is important, credit cards are a serious responsibility that should only be used to pay for purchases within your means. You should also always plan to pay off your balance in full each month to avoid interest fees.

A good credit score should never cost you money either, meaning that you shouldn't have to take on debt just to build up your credit score. Instead, focus on taking small, consistent steps that move your credit score up the scale over time.

With so many new ways to build your credit, having no credit is no longer the long-term barrier that it used to be.

Topics: Credit Cards, 0% APR & Low Interest

MOVED I Spent Over $1,500 on the Holidays This Year. Here's What I Learned

Posted by Maurie Backman on Dec 30, 2019 10:00:00 AM

The holidays cost me a bundle this year, but I didn't let them wreck my finances. 

The holidays are often called the most wonderful time of the year. To me, they're one part wonderful and one part expensive. 

Don't get me wrong -- I love showering friends and family members with gifts during the holidays. It genuinely brings me joy to be able to do nice things for good people. But it also takes a lot of saving and advanced planning to get through the holidays without racking up debt.

Man in Christmas sweater sitting in front of a pile of gifts while holding a credit card and looking at a document.

This holiday season, in fact, I spent a little over $1,500 in the course of four weeks or less. But thankfully, I did it without wrecking my finances in the process. Here's how I pulled that off -- and how I managed to get past a few hiccups that drove my costs up. 

I started saving in January

Though I have an emergency fund with money set aside for unplanned bills, I don't allow myself to use that account for the holidays. The reason? The holidays aren't an emergency, and also, they're not exactly a surprise. Rather, they come up at the same time every year, so there's ample opportunity to save for them. 

What I usually do is to set money aside each month for that year's holiday spending, beginning in January. This year, I went with $100 a month, which didn't turn out to be enough, but I'll get to that in a minute. By putting that expense in my budget, I was reminded to send $100 a month into a dedicated holiday savings account

I set spending priorities

Going into the holidays, I knew I had a specific amount of money earmarked for seasonal spending. I also realized early on that I'd need to spend that money judiciously if I wanted it to last, so to that end, I set priorities and skimped on or avoided certain expenses that other people tend to pay for at this time of year. 

I was also relatively savvy when it came to shopping. Knowing full well that the best deals can't always be found on Black Friday or Cyber Monday, I started digging around for discounts in mid-November and continued doing so until mid-December, even if it meant cutting it close on the gift-arrival front. 

I made quick adjustments when my costs came in higher than expected

As well as I thought I'd planned for the holidays, I did encounter a few surprise expenses that I neglected to save for. First, friends of mine asked me to participate in a gift exchange that wasn't part of my budget. I felt bad saying no, so I opted in. Next, I wound up hosting a Thanksgiving leftovers swap after a friend put the idea in my head and got me so pumped about it I couldn't not do it. While I didn't have to spend any money on food, buying wine and beer for a dozen people set me back another $50 or so. 

Finally, just when I was convinced I'd finished buying all of my holiday gifts, I suddenly remembered that I'd neglected to purchase anything for the people who run my kids' extracurricular activities. I'd remembered their teachers at school, but not these instructors who no doubt deserved a little something around the holidays, too. 

All told, I wound up spending over $1,500 on the holidays when I thought $1,200 would cut it. Rather than take that $300 from my emergency savings, I cashed in some credit card reward points to cover some of those additional expenses. I also canceled a couple of nights out with friends that probably would've cost $50 or more a pop to make up the difference. 

Avoiding holiday debt

There's a lot of pressure to spend money during the holidays, but if you're starting 2020 with a pile of debt because of them, consider this your wakeup call to not have a repeat. By earmarking money in a savings account every month leading up to the holidays, I didn't have to worry about coming up with that $1,500 all within the same few weeks. And by setting priorities during the holidays, I made the most of the money I had available to me. 

Of course, I did wind up spending a little more than anticipated, but ultimately, had that extra $300 or so been a real hardship, I would've said no to the gift exchange or not done the post-Thanksgiving gathering. 

And that leads to one final point: One of the best ways to avoid hurting your finances during the holidays is to learn to just say no. Remind yourself of that when the 2020 season rolls around, because it could help you avoid a world of debt -- and a world of regret -- at a time when we're all supposed to be celebrating. 

Topics: Credit Cards, Cash Back & Rewards

MOVED 3 Money Mistakes I Made With My Kids

Posted by Dana George on Dec 30, 2019 6:00:00 AM

Part of being a parent is regretting the mistakes. Here are some of the financial mistakes I made with my kids. 

I love being a mom. Even if I lived to be 125, I could still never string together a combination of words that would adequately describe the joy of motherhood.

Speaking of 125 years: That's also about how long it would take to list the idiotic ways I fouled things up as a mother. I may have enjoyed being a mother, but I sure made a ton of mistakes, some of them financial. Here are the money mistakes that strike me as the most egregious:

A child cries while her mom looks distressed and guilty in the background.

1. Teaching them that money grows on trees

We never wanted our boys to know that we were struggling to cover our bills, including  newly acquired student loans. This made sense when they were 2 and 4. No little kid should have to deal with their parents’ issues. But as they grew, we should have taught them about money. Even as we madly juggled bills so we could pay our student loans, we made sure they had no idea what was going on. Soccer camp? Sure! Another new pair of ridiculously overpriced tennis shoes? Why not? Dad hasn't purchased a new pair of pants in 10 years, but that's because he doesn't enjoy shopping. 

I set a horrible example by charging anything I could not immediately pay cash for to my credit card, including school clothes, weekend trips, and over-the-top holidays. In an effort to create a world for them that did not actually exist, I mortgaged our future. 

My advice to younger parents is to start young. Don't wait until your kids are about to fly the coop to show them your family budget, discuss the differences between wants and needs, and teach them how to balance their own budget. Teach them about credit cards and how to use them responsibly. Your good example is the best personal finance teacher they could ever have. 

2. Advising my children not to work

My parents didn't want me to have a job when I was a teenager because I "had the rest of my life to work." I insisted on taking a job at Royals Stadium and Arrowhead Stadium because the uniforms were just so darned cute. I adored those jobs. I liked meeting new people, being part of something big and exciting, and receiving a full $14 per game.

When my boys were the same age, I told them that I wanted them to focus on school and their extracurricular activities because "they had the rest of their lives to work." You know how I could have taught them about money? I could have allowed them to earn some of it for themselves. 

If I had it to do over again, I would insist they work -- at least part-time. Working teaches kids what it takes to have money in their pockets, how to deal with different kinds of personalities, and it can also grow their confidence. 

3. Making them believe things will take care of themselves

We always knew that the boys were going to college. They wanted it and we wanted it for them. We had their undergraduate tuition worked out but had no idea how they would pay for graduate school. The hope was that they would get through grad school and land jobs so great that they would never have to worry about the impact of those student loans.

We talked to the kids about everything under the sun, but never once discussed student loans. Most of the mistakes I made as a mother were the result of on-the-job-learning and a naturally goofy personality. But the decision not to discuss finances with them when they were old enough to be in graduate school pricks at my conscience. And while I'm on the topic of really bad decision-making, we also told them that we would only pay for their undergrad if they immediately started a graduate program afterward. I feel guilty every time I think about it. 

We had our big "talk" the year each of them finished grad school. It was very late in the game and made the financial reality of their situation more difficult. Today, my sons are both amazing money managers and wise investors, but the fact that we only taught them what they needed to know in the 11th hour was a lot like teaching a passenger to swim while the Titanic was sinking. We're fortunate that they took the lessons to heart. 

Begin to teach your kids about money when they're young by explaining how much money is in their piggy bank and not allowing them to spend a penny more. Require them to do chores for their allowance, encourage them to take a part-time job when they're old enough, and let them have a peek at your monthly bills so they get an idea of what adulting looks like. Above all, encourage them to ask questions.

Parenting is many things, but above all, it is humbling. We do our best and hope it all works out. The fact that we're supposed to teach them to say no to drugs, about the birds and the bees, and how to be good people is firmly instilled in us. It may be time to add the importance of introducing our kids to how money works. It seems to me that it's the topic they're most likely to call and thank us for covering. 

Topics: Credit Cards, 0% APR & Low Interest

MOVED 4 Reasons You Still Have Credit Card Debt

Posted by Kailey Hagen on Dec 29, 2019 8:00:00 AM

You can get out of credit card debt, but you may need to change your approach.

Credit card debt is financial dead weight. It costs you a lot of money without offering any real benefit and can be really hard to get rid of once you get into it. Many people try to break out of the debt cycle but fail to do so, usually for one of the following reasons. If any of these apply to you, consider switching up your strategy to start seeing some real progress.

Young woman anxiously chewing on credit card while looking at phone.

1. You're spending too much

When you're trying to pay down credit card debt, you should reduce your credit card usage to prevent your balance from growing any further. You should also reduce your spending overall to free up more cash for debt repayment. If you're spending indiscriminately without giving any thought to your credit card debt or its long-term impact on your financial security, your debt problems will likely get worse over time instead of better.

Switch to cash instead of credit cards where possible and create a budget for yourself, cutting out unnecessary expenses like dining out. Put all the extra cash you save each month toward your debt repayment until it's paid off.

2. You're only making the minimum payment

It is possible to pay off your credit card debt by making the minimum payment, but only if you don't charge any more to the card and have a decade or two to spare. It can take years to pay off your credit card debt if you're only making minimum payments, and you'll probably cost yourself thousands of dollars in the process. If you want to make real headway, you have to start paying more than just the minimum each month. 

3. You're not using balance transfer cards

Balance transfer cards are one of the best ways to pay down credit card debt because they temporarily halt your interest payments, and so stop the growth of your debt. They give you a 0% APR for six to 21 months, depending on the card. You will pay a fee to complete the transfer, often a percentage of the balance you’re transferring, and if you cannot pay it all back before the introductory period is up, your remaining balance will begin to grow at the standard APR.

Balance transfer cards are a one-time-only opportunity, so you must be serious about paying down your debt if you're going to use them. When the introductory APR period expires on a card, you can never get it back again. If you have poor credit, this option might be off the table because your application may not be approved. In that case, try the next tip instead.

4. You're not targeting one card at a time

Targeting one card at a time is your next-best option if you're unwilling or unable to open a new credit card or take out a personal loan to cover the balance. This strategy involves making the minimum payment on all your cards to avoid late fees and then putting any extra money you have toward the card with the highest interest rate. When this balance is paid off, you throw all your money at the card with the next-highest interest rate, and so on, until you're debt-free.

It takes time, but this approach will minimize the amount you pay in interest overall. You can speed things up by limiting how much you charge to your credit cards so that your balance doesn’t grow any further.

Once you're out of debt, don't go back to the bad habits that got you there in the first place. Understand the causes of your credit card debt and take steps to ensure that they don't happen again -- such as creating an emergency fund to cover unexpected expenses. 

Even if you use the above strategies, it will probably take you several months to a few years to get out of credit card debt depending on how much you’ve taken on, but don't let that discourage you. Getting rid of your credit card debt will reduce your stress, increase your financial security, and probably help your credit score, too, so it's well worth the effort.

Topics: Credit Cards, Balance Transfer

MOVED How to Read Your Credit Card Statement

Posted by Kailey Hagen on Dec 28, 2019 4:00:00 PM

You might be surprised about what you can learn from a close read.

You probably get at least one in the mail every month, but how well do you really understand your credit card statements? Yes, they tell you how much you owe and when you have to make a payment, but there's a lot more hidden in those pages than that. Here's a closer look at what you'll find in a typical credit card statement and where to look for certain information.

Young man sitting on his couch while on the phone and looking at his laptop screen in total confusion.

Credit card statement example

Every credit card statement is laid out a little differently, so yours might not look exactly like the one below, but you can expect to find more or less the same information in any statement, regardless of your card issuer.



Images source: Kailey Hagen.

Glossary of credit card statement terms

Here's what each of the labeled sections in the images above means.

1. Account summary

Your account summary is an overview of your credit card statement for the month. It tells you all about your monthly credit card usage and how much you owe. Yours may not include all of these things or it may list them in a slightly different order, but usually, an account summary will list:

  • Account Number: This is your credit card number which you can use to identify yourself if you contact your card issuer.
  • Previous Balance: Your credit card statement typically shows your last month's balance for reference.
  • Payment Credits: This is how much you paid toward your credit card balance last month. If you paid the balance in full, this amount should be the same as your Previous Balance.
  • Purchases: This is the total dollar amount of purchases you made with your credit card during the billing cycle.
  • Balance Transfers: This is the total dollar amount of balances transferred to this credit card from another credit card during the billing cycle. Your card may not include any mention of balance transfers if the card does not permit them.
  • Cash Advances: This is the total dollar amount of cash your credit card issuer advanced you during the billing cycle. Your credit card statement might not include this if your card doesn't permit cash advances.
  • Fees Charged: This lists the total amount of fees you've incurred this billing cycle, including things like late fees, balance transfer fees, and cash advance fees.
  • Interest Charged: If you carry a balance, this will tell you how much that balance accrued in interest over the billing cycle.
  • New Balance: This is the new amount that you owe the credit card company based on your purchases, cash advances, and balance transfers from this month plus any balance you have been carrying on the card.
  • Past Due Amount: If you haven't been keeping up on your credit card payments, this will tell you how much you are behind on paying.
  • Credit Access Line: This is a fancy way of saying your credit card limit -- the maximum amount you can charge to your credit card.
  • Available Credit: This is your credit access line minus your new balance. It's how much more you're able to charge to your credit card.
  • Cash Access Line: If your card allows cash advances, this will tell you up to how much you can borrow.
  • Opening/Closing Date: This tells you which dates are included in this billing cycle. Purchases before the opening date or after the closing date will appear on your previous or next credit card statement, respectively.
  • Days in Billing Cycle: This tells you the number of days in your billing cycle. It will usually be around 30.

2. Credit card statement balance and payment information

The payment information section provides you with the most important information about your new balance and your monthly bill, including:

  • New Balance: Though it's listed elsewhere on your credit card statement, the card issuer lists it here, too, so you can't miss it.
  • Minimum Payment Due: This is the minimum amount of money you must pay to the credit card issuer this month to avoid a late payment fee.
  • Payment Due Date: This is the date your payment must reach your credit card issuer by to avoid a late fee.

3. Late payment warning

The late payment warning tells you the maximum dollar amount that you could be required to pay if you don't pay your credit card bill on time. Card issuers usually don't charge you this amount for a first offense. Check your cardholder agreement for more information on late payment penalties for your first and subsequent late payments.

4. Minimum payment warning

The minimum payment warning usually includes a table that helps you understand how long it will take to pay back your balance if you make only the minimum payment. Often, that period is several years -- and that's if you don't charge any more to your card in the meantime. It may also include a comparison section showing how much faster you could pay off your balance if you paid more than the minimum. Some credit card statements also include a phone number that borrowers can call for credit counseling if they are struggling with their credit card debt.

5. Rewards summary

Your credit card statement should have a rewards summary if your card offers rewards. This section contains the following information:

  • Previous Rewards Balance: This is how many rewards you had prior to this billing cycle.
  • Rewards Earned This Month: This tells you how many rewards you earned during this billing cycle.
  • Bonus Rewards: If your card offers bonus categories, it might break out the number of bonus rewards you earned for the month and list them here.
  • Total Rewards Available: This is your new rewards balance, including any rewards you earned this billing cycle.

Visit your online credit card account or contact the card issuer by phone to see how much those rewards are worth and what you can spend them on.

6. Important changes to your account

This section highlights changes your card issuer plans to make to your account in the near future. These might be changes that apply specifically to you, like triggering a penalty APR because you've made a number of late payments, or it could be things that apply across the board to all cardholders, like an increase to the APR

It should tell you which of your transactions these changes will affect and when the changes will take effect. If you have any questions, you can contact your credit card issuer for more information.

7. Payment coupon

If you pay your credit card bill by mail, cut off this payment coupon and include it with your check. You must also list your payment amount on the coupon. This helps speed up the process and ensures that your payment gets applied to the right account. If you pay your credit card bill online or you have the money debited from your bank account every month, you don't have to worry about the payment coupon.

8. Account activity

The account activity section lists all the transactions you made during this billing cycle, including the date of the transaction, the merchant name, and the dollar amount. Some credit card issuers also attach a reference number to each purchase. That way, if you have questions about a purchase or you suspect you might be a victim of identity theft, you can quickly tell the card issuer which purchase you're referring to.

Those who carry a credit card balance from the previous month and those who did a balance transfer or took a cash advance will find a more detailed breakdown of the fees and interest they incurred in this section as well.

9. Fee and interest totals to date

Your credit card statement may include a brief table summarizing how much you've paid in interest and credit card fees for the year to date. Let this serve as motivation to you if you're trying to pay down your credit card debt.

10. Interest charges

The interest charges section gives a more detailed explanation of how the card issuer calculates your interest. It may have separate sections for purchases, balance transfers, and cash advances if they all have different APRs. You'll also find information on promotional APRs here, if they apply to your account, including expiration dates.

You might see symbols, like (v) or (d) after the interest charges in this section. These are a sort of mini glossary. Some of the most common terms and symbols you might see include:

  • Promotional APR: This is a lower APR than the standard APR and it only lasts for a certain number of months after you open the card. It may apply to purchases, balance transfers, and cash advances, or only one or two of these.
  • (v): This stands for variable. It means that the card's interest rate is tied to the prime rate or a similar benchmark that may change over time. If it does change, your interest rate may decrease or increase accordingly. The card issuer does not need to notify you about this in the Account Changes section because this relationship is outlined in your cardholder agreement.
  • (d): This means your card issuer uses the Daily Balance Method to calculate your interest charges. This method totals up your actual daily balance on every day of your billing cycle and multiplies this by the daily rate, which is 1/365 of your APR.
  • (a): This means your card issuer uses the Average Daily Balance Method to calculate your interest charges. This is where it takes the average balance on each day of your billing cycle, adds them up, and multiplies them by the daily rate.

Frequently asked questions about credit card statements 

Here are the answers to a few commonly asked questions about credit card statements.

How can I view my credit card statement online?

You can view your credit card statement online at any time by logging into your online credit card account and navigating to the statement information. If you've opted to receive electronic statements, your card issuer should send you an email every month when your new statement is available. It should contain all of the same information as the paper statements detailed above. 

If you prefer to get your credit card statements by mail, you can choose paper statements instead, though you may have to opt in as more and more companies are transitioning to online statements to save paper.

What happens if I pay my credit card bill before I get the statement?

You can pay your credit card bill at any time during the billing cycle, even before you receive your monthly statement. On your statement closing date, which is usually at least 21 days before your payment due date, your card issuer will calculate your interest charges for the month and your minimum payment. It also reports your payment to the credit bureaus.

If you pay your balance off before this date, your payment will reduce or eliminate your balance and give you more credit to spend in the second half of the month. Making a payment will also lower your credit utilization ratio because credit bureaus only see what the credit card issuers report once per month. When your credit card bill arrives, it should show all of your purchases for the month, plus your first payment. Your New Balance should list your remaining balance for the billing cycle.

If you pay after the statement closing date but before you actually receive your statement, you can calculate what you owe by subtracting what you already paid from the new balance on your credit card statement when it arrives.

Credit card statements admittedly aren't the most exciting reads, but there's a lot of important information packed in them. Hopefully, this guide helps you better understand yours.

Topics: Credit Cards, 0% APR & Low Interest

MOVED Which Generation Has the Best Credit Scores?

Posted by Christy Bieber on Dec 28, 2019 10:00:00 AM

Most Americans have good credit, but some generations do better than others.

According to recent research from The Ascent on average credit scores, most Americans have fair or good credit. In fact, the average VantageScore in America was 694 in the first quarter of 2018 -- which is a score most lenders would view as reasonably good.

But while credit scores have been trending upward and the average American is doing OK when it comes to their credit history, some generations of Americans are definitely doing better than others. 

An older woman and a younger woman looking at a laptop screen together.

So which generation is winning in the credit score game? 

Which generation has the highest credit scores?

According to The Ascent's research, the silent generation has the highest average credit score of any generation. Members of this older demographic group had an average VantageScore of 729 in 2017. This was a full 26 points higher than the generation with the next highest score. 

As the table below shows, scores went down from there, with baby boomers beating Gen Xers, who had a higher average score than members of Gen Y. But Gen Y members beat out the youngest group, members of Gen Z.  


Average 2017 VantageScore

Gen Z


Gen Y


Gen X


Baby boomers


Silent generation


Data source: Experian.

Why does the silent generation have better credit than other generations?

It should come as no surprise that older Americans generally have better scores than younger ones, nor that scores improve with age. 

Older Americans have had more time to pay down debt, which helps to keep their credit utilization ratios low. They've also had a longer period of time to develop a strong credit history, simply by using their credit cards for longer, and to take out different kinds of loans. All of this affects credit scores, which are calculated based on payment history; amount of available credit used; age of credit; mix of different kinds of credit; and amount of new credit applied for.

As people get older, they also often become more financially stable, which makes them more able to be financially responsible. Silent generation members, for example, are very likely to be retired and collecting Social Security and pension or investment income. They're not dependent on a paycheck to pay their bills, so they may be insulated from, say, unemployment or underemployment that could lead to a missed payment or a maxed-out credit card.

Younger generations have also faced unique financial burdens that many of their older counterparts didn't have to deal with. These include high student loan balances and a changing economy that makes it far less likely they'll get a stable long-term job with ample employment benefits. All of these factors can make it harder to engage in the types of borrowing behavior that can lead to great credit. 

So as you can see, there are many explanations for the increase in average credit scores as people get older, and why older generations have higher average scores than younger ones. 

You can improve your credit score

Whether your credit score is on par with others in your generation -- or is a little better or a little worse -- there's likely room for improvement, unless of course you have a perfect score. Practicing good borrowing behavior, including keeping credit balances low and making payments on time, can help you to ensure your credit score is one you can be proud of.  

Topics: Credit Cards, 0% APR & Low Interest

MOVED How 1 Phone Call Can Get You More Value From Your Credit Card

Posted by Lyle Daly on Dec 26, 2019 4:00:00 PM

It's the credit card trick most consumers aren't using.

If the annual fee on your credit card is coming up for payment, you may be weighing whether the card is worth keeping. The benefits of the best rewards cards can certainly justify their fees, but that's only true if you make the most of them. And if you have multiple credit cards with annual fees, it's more likely that you won't want to pay for all of them.

The typical consumer goes with one of three options: downgrading to a no-annual-fee alternative, canceling the card, or deciding to pay the fee for another year. None of those are necessarily bad ideas, but there is a way you can get a better deal.

Older woman writing something down in notebook while on the phone.

How credit card retention offers work

Credit card companies don't want good cardholders who pay their bills on time to cancel. That's why they have what are known as retention offers. These are offers that representatives in the retention department can make to get you to reconsider.

Common examples of retention offers include:

  • An annual fee waiver
  • Bonus rewards
  • A statement credit after you make a set amount of purchases

To provide a firsthand example, I recently called to cancel a card with a $95 annual fee. Although the representative said she couldn't waive it, she could offer me a $95 statement credit that would apply after I made $95 in purchases, which would effectively cancel out the fee. She also offered me 500 bonus points during each of the next 16 billing cycles when I made at least $500 in purchases, for a potential maximum of 8,000 bonus points.

It doesn't take anything special to get these kinds of offers. You just need to make a cancellation call to your card issuer.

And although conventional wisdom is that you have a better chance at a retention offer if you use the card frequently, this isn't a requirement. I also called to cancel a card with a $149 annual fee. With this card, I immediately stopped using it after I got the sign-up bonus, so there was almost 11 months of inactivity. Despite that, the representative still offered to waive the $149 annual fee for me.

Using retention offers to your advantage

A retention offer can get you some extra value from a credit card you weren't sure about keeping, but that's not the only way to take advantage. You can also see what offers are available for credit cards that you don't want to cancel.

Here's what you do -- call the number on the back of your credit card and say that you're thinking about canceling. Make sure you have a cancellation reason ready. One simple reason is that you're not sure the card's benefits are worth its annual fee.

You'll be transferred to the retention department, where you can tell the representative why you want to cancel the card. Then, it's just a matter of seeing what they offer you. This may be negotiable, so don't be afraid to try asking for more. For example, if they offer you 5,000 bonus points for spending $1,000 in three months, ask if they'll bump it up for 10,000 points for $2,000 in spending.

If you receive a retention offer, you can accept it immediately on the call. The worst-case scenario is that they don't offer you anything. In that case, you can tell them that you've changed your mind and decided to keep the card. You don't need to worry about accidentally canceling a card you wanted to keep, because the representative would need to officially confirm the cancellation with you before processing it.

Maximizing your credit card's value

Considering you can check whether you're eligible for a retention offer in one cancellation call, it's smart to do this with all the credit cards you carry. There's a good chance the card issuer will offer you something of value, and there's no work or risk required on your part.

Topics: Credit Cards, Cash Back & Rewards