Your credit card bill is a snapshot of your account at the end of each statement period. It shows what you owed at the start of the billing period, what you owe now, and every charge and payment that you made during the period. In combination with your checking account register and bank statement, it helps provide a nearly complete record of how you spend your money each month.

Though the statement wasn't designed to help you evaluate your spending habits, you can use it for that purpose. If you're trying to find ways to trim expenses or set aside more for investment, you can track money you're spending on discretionary items. Instead of spending all of it, you might consider putting a portion in an investment account. You can also evaluate what you are spending on finance charges.

All statements contain virtually the same information. If you know what the terms mean and how they affect what you can spend and what you will pay, you can use credit wisely.

• New balance is the amount you owed on the day the statement was prepared. It includes any finance charges and late fees.
• Credit line is the amount of credit you can use. It can be anywhere from $500 to $10,000 or more.
• Previous balance is what you owed on the day your previous statement was prepared. It's used as a basis to figure how much you owed on the day this statement was prepared.
• Minimum payment due is what you must pay. Typically you owe 2.5% of the new balance or $10, whichever is greater. Whatever you don't pay will be carried forward and subject to finance charges.
• Available credit is the amount of credit you had available on the day the statement was prepared.
• Payment due date is the last day your payment can be received to avoid additional finance charges or late fees.
• Cash access line is money you can withdraw from an ATM with your credit card. You need a personal identification number (PIN) to use an ATM.
• Statement closing or billing date is the date the statement was prepared. Any charges after this date will appear on the next statement.
• Finance charge is the interest charged on the amount you owe. Two cards with the same finance charge won't necessarily charge you the same interest, even if you owe the same amount. That's because what you pay depends on how the company figures the balance on which they charge you interest.
• Credits are amounts subtracted from the balance due for payment, overpayment, incorrect charges, or returned merchandise. For example, if you dispute a charge, the lender may credit you the amount until the dispute is settled.
• Charges are records of the purchases and cash withdrawals you made, giving a date and reference number for each. Check these details against your records to be sure that the charges are all yours. There can be mix ups in names and account numbers, as well as times when bills are double-charged.

Each card issuer figures your finance charges according to the agreement you made when you signed up to use the card.

The amount you owe depends on the method used to calculate your finance charge: adjusted, average daily, or previous balance.

For example, suppose you pay an 18% annual finance charge (1.5% per month) on amounts you owe. Your previous balance is $2,000, and you pay $1,000 on the 15th day of a 30-day period: