(1) Type of Balance: Numbers to the right of "Purchases" refer to goods purchased. Numbers to the right of "Cash Adv" refer to cash advances (none on this statement example).

(2) Previous Balance: This shows the amount due on the previous month billing. Here is was $1,241.28.

(3) Average Daily Balance: Daily average used to compute finance charges. Not all banks use a Daily Average to compute interest.

(4) Percentage Rates: The interest on amounts not paid before the due date (#9). The Monthly Periodic Rate is simply the Annual Rate divided by twelve. In this example the bank charges the same 16.8% interest on purchases as it does on Cash Advances. Some banks charge more for Cash Advances.

(5) Charges: Amount charged to card in past month. New charges.

(6) Payments: Amount paid during the month. On this example $1,231.28 was paid. Note that the previous balance was $1,241.28 so the bill was not paid in full. A balance of $10 is still owed.

(7) Finance Charges: Because payments (#6) were $10 less than the previous balance (#2), finance charges apply to ALL the new charges (#8) of $1,454.95. The Finance Charge for the month is $21.26. It was computed by multiplying the monthly rate (1.4%) by the average daily balance shown in (#3).

(8) New Balance: The sum of (#5) and (#7). This is the amount that should be paid by the payment due date (#9) to avoid further finance charges.

(9) Payment: Pay by this date to avoid finance charges. The Grace Period in this example is 25 days.

(10) Account Number:  Do not give the number out except to make a purchase.

(11) Credit Limit: How much the bank will let you charge.

(12) Transaction Date: The date an item was purchased or a payment received by the bank.

(13) Posting Date: The date the bank received the charge slip from the merchant. Usually only a few days after the Transaction Date.

(14) Reference Number: Unique number applied to each purchase or payment