Barry asks: “I need some help understanding what my credit card portal information is saying. I don’t understand the breakdown on the portal they give.”
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Q&A 83 – Debits & Credits On My Credit Card? – Shownotes
Barry asks:
Need some help understanding what my credit card portal information is saying. I’m with Vanquis banking (yes, i’ve learnt my lesson) and i don’t understand the breakdown on the portal they give.
Account balance
Balance carried forward: £1,367.94
Credits to your account: £1,914.35
Debits to your account: £659.84
Current balance: £113.43Could anyone give me a breakdown into this? I know this is a current £3,000 limit to the card which i you have only £113.43 left to pay.
Question is, what do the “credits/debits to the account” mean?
Thanks!
Barry, thank you for your question and I’m glad you asked as it is vital that you understand how your credit card works or you could get yourself into some financial difficulties.
Credit Card Terminology
The good news is that it’s just terminology and it’s quite easy to understand.
Balance carried forward: £1,367.94
You start with you balance carried forward. This is how much you owed from last time. The terminology is from the stand-point of the credit card provider. So, they have an asset (money owed by you to them) of this amount.
Debits to your account: £659.84
Then, you have debits to your account. This is the total value of all the purchases that you’ve made to the account during the current billing period. A debit to your account increases the total debit amount that the bank is owed. Therefore, they did have a asset amount (which is a debit) of £1,367.94, and then your purchases gave them more debits.
Credits to your account: £1,914.35
You then have “credits” to your account. This is the total value of payments that you’ve made to the account during the current billing period. They are credits in that they reduce the amount that you owe to the bank.
So, to this point, you started with £1,367.94 on the card. You bought £659.84 worth of stuff (the debits to your account) bringing your total to £2,027.78. You paid off £1,914.35 (credits to your account) resulting in a final balance of…
Current balance: £113.43
This means that your balance carried forward from this point will be this debit of £113.43 and the whole cycle starts again.
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