In most cases, credit cards have a statement credit that comes with them. In simple terms, a statement credit is the equivalent of a loan – you receive money credited to your account rather than borrowing it to purchase a purchase. A statement credit typically shows up on your credit card statement, sometimes in an individual transaction and at other times as a single category of activity on your credit report. This may be useful to you, but you need to know how it works. Here's what you need to know about these statements.
Most credit companies are required to provide you a statement credit with all purchases made by you. These are called statement credits because they come with a statement attached. The statement credit tells you what you have spent and when, as well as showing you how much the charge is and how long the statement has been open. Some credit companies will even show you how long you will have the card for, and how many years you can keep the card for before it will expire.
What you are not told, however, is that there is another type of credit account. That is referred to as a statement debited from your credit card account, which will show up as activity on your credit report as well as being reported on your credit report. This type of statement credit will show you the total amount you have charged on your card in the current billing period. Many companies will debit the amount of the statement credit as soon as they receive it, making it possible to keep the amount debited to a minimum while paying off any outstanding balance.
You should always check your statements regularly to make sure your credit card accounts are not over-limit. In some cases, you may be billed for the statement credit over and above your credit limits. In such a case, you should contact your credit company and ask for the credit limit adjustment, or the actual charge you incurred on the statement credit and request that the account be returned to its former limit.
If you are concerned that you may not have sufficient available credit to keep the credit card account active, there are other alternatives. You can apply for credit cards with different companies, or you can apply for a secured card. With a secured credit card, you deposit funds into an account that is linked to a credit card. When you use your card, the funds in the account can be withdrawn only when you are required to make a purchase.
You may also decide to transfer . . . . . . the balance of your credit cards so that you have only one card. in order to avoid making statement payments on the credit cards. In this case, you can still have the ability to charge as much as you want, but you will be responsible for repaying the balance.