Credit Cards

A credit card allows you to purchase items now and pay for them later. Credit cards are an example of revolving credit.

When you get a credit card, it will have a limit, also known as a “line of credit.” Your first credit card may have a limit of $350 to $500. Here are some important things to remember about using a credit card:

  • Every month you will get a credit card statement listing any purchases you made that month. Read through the purchases and make sure the information is correct.
  • You’ll find a due date included on the credit card statement. The due date is the date when your payment must be received by the credit card company. The credit card company does not require you to pay your entire balance at the end of each month. You can pay the minimum monthly payment.
    If you only pay part of your balance, the credit card company will charge you interest on the amount that you didn’t pay. This interest expense can add up, and what you purchased can end up costing you twice as much.
  • There may be an annual fee for having a credit card.

Helpful Tips!

A few words of caution concerning your credit card:

  • You are responsible for purchases made with your credit card. Read your statement very carefully, especially if you need assistance in using your credit card. If you learn that someone has used your card without your permission, call the phone number on the back of the card to report this activity.

  • Many credit cards advertise low interest rates, but they may not make it clear whether the rates will go up after the introductory period. To find the best credit card for you, take a look at some of the credit card comparisons on websites like,, and

  • If you do not pay the minimum payment on time each month you will hurt your credit history. If you pay the amount due in full before the due date there will be no additional charges (no interest due) and you will improve your personal credit history.

Additional Fast Facts about Credit Cards

  • When used correctly, credit cards can help you build a good credit history. This will come in handy when applying for jobs, renting an apartment, or buying a car.
  • It is very important to make prompt payments. Credit card companies want to know that you are financially responsible. Whether or not you make your payments on time is one of the biggest things they will take into consideration if you want to borrow more money.
  • Try to get a credit card with no annual fee and a low interest rate.  
  • If you find that you can’t pay the entire balance of your credit card bill for several months in a row, then you are spending too much money.

Below is a sample monthly credit card statement. Beneath the sample is a description of each section. Here is another example of a credit card statement.

Sample Monthly Credit Card Statement

ABC Bank Credit Card Account Statement
February 21, 20XX to March 22, 20XX

Summary of Account Activity

Previous Balance$535.07
Other Credits$0.00
Balance Transfers+$785.00
Cash Advances+$318.00
Past Due Amount+$0.00
Fees Charged+$69.00
Interest Charged+$11.36
New Balance$1,786.00
Credit Limit$2,000.00
Available Credit$214.00
Statement closing date3/22/XX
Days in billing cycle30

Call Customer Service: 1-800-XXX-XXXX
Lost or Stolen Credit Card: 1-800-XXX-XXXX

Payment Information

New Balance$1,786.00
Minimum Payment Due$53.00
Payment Due Date4/20/XX

Late Payment Warning: 

If we do not receive your minimum payment by the date listed above, you may have to pay a $35 later fee and your APRs may be increased up to the Penalty APR of 28.99%.

Minimum Payment Warning:

If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example:

If you make no additional charges using this card and each month you pay…You will pay off the balance shown on this statement in about…And you will end up paying an estimated total of…
Only the minimum payment8 years$2,785
$623 years$2,232

If you would like information about credit counseling services, call 1-800-XXX-XXXX.

Credit Card Statement Description

Summary of account activity

A summary of the transactions on your account—your payments, credits, purchases, balance transfers, cash advances, fees, interest charges, and amounts past due. It will also show your new balance, available credit (your credit limit minus the amount you owe), and the last day of the billing period (payments or charges after this day will show up on your next bill).

Payment information

Your total new balance, the minimum payment amount (the least amount you should pay), and the date your payment is due. A payment generally is considered on time if received by 5 p.m. on the day it is due. If mailed payments are not accepted on a due date (for example, if the due date is on a weekend or holiday), the payment is considered on time if it arrives by 5 p.m. on the next business day. Example: If your bill is due on July 4th and the credit card company does not receive mail that day, your payment will be on time if it arrives by mail by 5 p.m. on July 5th.

Late payment warning

This section states any additional fees and the higher interest rate that may be charged if your payment is late.

Minimum payment warning

An estimate of how long it can take to pay off your credit card balance if you make only the minimum payment each month, and an estimate of how much you likely will pay, including interest, in order to pay off your bill in three years (assuming you have no additional charges).

Helpful Tip!

Remember, your goal should be to pay your credit card balance in-full each month. If you are carrying a balance on your card from one month to the next, you are probably spending too much money.