Have you ever looked at your credit card statement and ended up just scratching your head in frustration? Well join the club! But don’t take any comfort in the fact that you have plenty of company, because lack of knowledge can cost you….right on your credit report, and once there can stay with you a while.

Adding to the challenge is that almost every creditor’s statement is slightly different, varying in format and billing cycle and interest calculations. You first want to check what you purchased and what you borrowed, so make sure you save all your receipts to make sure you weren’t charged for something you didn’t buy or were double billed. Immediately dispute any discrepancies via phone and in writing.

Next you’ll want to verify the interest rates being applied for each type of purchase. Remember, cash advances almost always carry a higher interest than normal purchases and interest usually accrues from the date you received the money. Also, if you have any balance transfers with introductory interest rates, verify that it is correctly noted and hasn’t been increased prematurely.

Review how your interest is calculated (this information is usually on the back of your statement) and make sure that the right rate has been used for each category. On purchases, most cards take your average daily balance over the billing cycle and divide it by one-twelfth of your annual percentage rate (APR).

Lastly, but maybe most importantly, make sure you send your payment in well before the due date. In order to have your payment credited on time to avoid a late fee, it must be posted by the due date shown on the statement. Therefore, if paying by mail, it is advisable to mail your payment at least a week in advance. For those whose cash flow doesn’t allow an early remittance, paying by phone or on-line might be a good alternative.

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