April is Financial Literacy Month and you can visit finacialliteracymonth.com to see a 30-day plan to help with money management.
We’re going to look at financial literacy in the sense of learning how to read certain financial statements. A number of websites, including mycreditunion.gov offer visual depictions of a credit card statement and explain each section.
It is understandable if you just look at the basics (how much you owe and when) but you could overlook valuable information that could change how you manage your credit card use and help you adjust your budget and financial outlook.
Minimum payment warning: Rather than ignore this part that tells you how long it will take to pay off your balance when you only make the minimum payment, pay attention to it and let this information since in because it can be motivating.
In contrast to the (possibly very long) amount of time it will take to pay off your card paying only the minimum, credit card companies also inform you of how much you can pay and get rid of your balance in three years. Use this information to motivate you. If you cannot commit to paying more every single month, commit to going above the minimum payment as often as you can. If you can’t pay the balance off in three years try to pay it off as close to that time as you can or sooner if possible.
Available credit: With some credit cards, the Credit Available is different from Credit Available for Cash and you need to pay attention to this. The limit on the amount you can spend using your credit card can be different from the amount you can get as a cash advance. It may not be a large difference but you do want to know what you have available.
For more information, Adventures in Education offers a primer to help you understand credit card lingo.