Why It Pays to Look at Your Annual Credit Card Account Summary
Reviewing that summary can be a real eye-opener.
Some of us check our credit card statements monthly -- usually when we log on to pay our monthly bills. But have you looked at your annual credit card account summary? Here's why you should.
Understanding your spending habits
Your annual credit card account summary breaks down your spending into categories so you can see where your money has gone over the last 12 months. The first time I reviewed mine, it was a real eye-opener.
For one thing, I realized just how much money I'd spent on food, from groceries to restaurant meals to takeout orders on nights when I was too tired, lazy, or busy to cook. Don't get me wrong -- I'm all about serving my family tasty, nutritious meals, and I'm willing to spend some money to do that. But the amount was, frankly, out of hand. That was my wakeup call to cut back on takeout and delivery in particular.
Another thing I realized is how much money I'd spent on charitable donations, fundraisers, and gifts. I think all of these things are important, but they were eating up more of my income than I realized. Seeing what I'd spent on those purchases prompted me to rework my budget and cut back in other areas to make room for more spending in that category.
It pays to examine your annual credit card account summary, because you may realize, like I did, that your budget needs a redo. Or, you might experience a lightbulb moment when you suddenly understand why you aren't meeting your savings goals.
Getting the right credit cards
Another good reason to review your annual credit card account summary? It may prompt you to apply for a better credit card. Say you use a card that only gives you 1% back on gas, but upon reviewing your statement, you realize you fill up your tank far more often than you thought. It could pay to sign up for a card that offers more generous cash back for gasoline fill-ups -- say, 2% or 3% back.
Seeing your annual spending may also prompt you to cancel cards that charge an annual fee that you don't get good use out of. Say you're paying a fee for a card that gives you generous rewards for travel. If you see that you spend very little on travel, that fee may not be worth it.
Of course, reviewing your credit card account summary for the year may not be the most exciting way to spend an evening, but it's a modest time investment that can pay off in a big way. If you've yet to check out your annual credit card account summary, just log on and pull it up. It could set you on a smarter financial path.
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