How to Analyze Your Business Credit Card Statements

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    Many business owners dislike deciphering their credit card statements, much less their monthly merchant statements. They would rather just blindly trust the stated amounts. However, this bad habit puts you at risk of overpaying your processor or card-issuing bank. Hidden fees might not seem much at first, but they could quickly add up to thousands if you’re not careful.

    For this reason, we encourage intensive credit card and merchant statement analysis. Take the time to review all your expenses, processed transactions, and accrued fees in the past 30 business days. Do not overlook a single item. Make sure you understand every dollar listed on your statement before paying your bills.

    Understanding What A Credit Card Statement Is

    Credit card statements summarize account activities for the past billing cycle. They break down all your card purchases, outstanding balance, unpaid dues, and accrued interest rates. 

    Your card statement will come from your issuing bank directly or their outsourced statement processing service provider. However, business owners might find it along with their merchant statements.

    If your business primarily pays via credit card, your statement will give you an accurate overview of your monthly overhead. Use it to trace areas where you could cut back. Note that overspending directly hurts your profit margins, so make sure you review your statements carefully.

    Analyzing Credit Card Statements 

    Are you having trouble deciphering the numbers listed on your business credit card statement? To make things easier, we listed some terminologies you’ll likely encounter: 

    Account Summary 

    The account summary section outlines your overall standing. It should include your statement balance, current balance, unpaid fees, due date, and accrued interest. You’ll also find any outgoing and incoming credits detailed here.

    Payment Information

    You’ll see the breakdown of your balance in the payment information. This section explicitly states your total credit card balance, the minimum payment you need to make, and available credit. 

    Pro Tip: The payment information section estimates how long it would take to clear your outstanding balance if you only make the minimum monthly payments.

    Late Payment Warning

    In line with the CARD act of 2009, card-issuing banks need to provide late payment warnings. This section should explicitly outline the legal consequences of missing multiple monthly payments and accruing months’ worth of unpaid interest.

    Payment Coupon

    If you typically pay your bills via mail, you’ll have to include the bank-provided payment coupon. It’s a small piece of paper that lists your outstanding balance and account number.

    Transactions From The Billing Period

    This section is perhaps the most crucial portion for business owners. It explicitly itemizes all the credits, payments, and charges made on your account over the past billing cycle. Call the bank right away if you notice any unfamiliar purchases.

    Total Interest And Fees Year-to-Date

    Card-issuing banks have to outline their charges. Check this section to see the detailed, itemized breakdown of all the fees you paid so far this year.

    Interest Charge Calculation

    After checking your total interest and fees paid, compare them side by side with the interest charge calculation section. The amount should match the stated APR and outstanding balance.

    Important Messages

    The important messages section summarizes the most crucial areas of your credit card statement. Card-issuing banks include varying pieces of information here, but you’ll generally see your credit limit, credit line, and outstanding balance.  

    Rewards Summary

    If your card is enrolled in a rewards program, this section will outline the points or credits you have accumulated so far.

    Frequently Asked Questions

    Do you still find your monthly merchant statements confusing? Processing Card can help. Get a better understanding of credit card and merchant statements by going through the questions SMBs commonly ask when deciphering them.

    How often do you get a credit card statement?

    Credit card providers typically send account statements at the end of every billing cycle. Perform your routine merchant statement analysis promptly to ensure that you resolve any excess fees charged to your account.

    Are credit card statements a month behind?

    Credit card statements typically include the past 28 to 31 calendar days. If the bank generates your billing statement on the 10th, your statement will start from the 11th of the prior month to the 10th of the current month.

    Can I change the statement date on my credit card?

    Although you can ask your card-issuing bank to change your monthly merchant statement date, they will likely deny your request if you already missed paying one billing cycle.

    The Takeaway

    Merchant statement analysis might seem like a headache, but your business needs it. Remember: statement processing service providers also make mistakes. Promptly decipher your credit card and merchant statements as soon as you receive them to avoid unnecessary fees. Otherwise, you might end up paying more than you should.

    Are you ready to equip your business with a POS system? Processing Card has you covered! Check out our guide explaining everything business owners should know about processing card payments.

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