Many people assume that a credit card statement is simply a monthly billing statement. However, there are actually five very important reasons why you must review your credit card statement every month. These reasons will help you avoid accumulating an enormous credit card debt with each bill you ignore.
First, credit cards allow you to make quick, impulse-buy purchases without even leaving the comfort of your home. Most credit cards have a built-in feature that allows you to charge an item for up to a certain amount without it being paid back. When you try to make an impulse purchase without paying attention to your card statement, you run the risk of overspending and then having to pay higher interest rates or even penalty fees on the item you purchased. When you pay close attention to your credit card statement, you will notice these types of mistakes much more often.
Second, many credit cards are designed so that you only pay interest on items you actually use. If you make a payment to a credit card company, you must also make an installment payment to them each month until the balance is paid off. This can quickly add up to a large amount of money. It is easy to fall into the trap of making only minimum payments on your credit cards, or only making minimum payments on your other bills. Once this cycle starts, it becomes very difficult to get out of debt.
Third, because the credit card statements are so easy to miss, it is common for consumers to not know what they owe. If you miss one payment and do not notify the credit card company, they will continue to charge you interest on the debt that you did not notice. As a result, you will accumulate debt with no idea that you owe this much money. As soon as you stop missing payments, your debt becomes much clearer. You will realize that you have several hundred dollars in outstanding credit card debt that you have been ignoring.
Fourth, when you check your credit cards regularly, you will notice that your spending habits have changed dramatically. It may seem like you are just using credit to buy things that are necessary for your daily life. However, most credit cards are designed to provide you with money when you need it. You may feel that you are paying for the things that you need and nothing extra. for others, but in reality, you are actually paying for other people's needs too. When you make extra payments, you are giving the money away to someone else for their needs as well. This can lead to an accumulation of debt that you do not even realize you have.
Finally, once you see the true credit worthiness of a card, you will notice that it will become more difficult to apply for another credit card. When you pay your bills on time, it makes it harder for the banks or lenders to decide that you are still a good candidate to receive credit or an upgrade of your existing credit. Once you are no longer eligible for an upgrade, you will find it easier to obtain loans or credit once again.