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Credit Cards

Decipher Your Credit Card Statement

Paperwork is necessary, not fun. Here's a painless way to run through those credit card statements and check for errors or sudden rate changes.

1. Match your receipts with the purchases and new charges listed on the bill to be sure they're yours. Discrepancies could mean that someone has stolen your card number.

2. Check the payments and credits. Was your previous payment credited to your account, plus any items that you may have returned?

3. Review your APR (often when credit card companies raise a rate, the customer is not informed.)

The APR (annual percentage rate) and finance charges (quoted in dollars) tell you how much you're paying if you carry a balance. The APR is usually higher for cash advances than for purchases. Make sure you know how much you're paying for each.

Finance charges may be calculated based on several methods: the adjusted balance (which subtracts any payments you have made and is most advantageous to borrowers), the average daily balance (all balances are added up and divided by the number of days in the billing cycle) or the previous balance, and may or may not include new purchases.

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4. See how much available credit you have. What percentage of your total credit line are you using? Aim for no more than 50% and as little as 25%, if possible -- to keep your credit score in check.

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