You will be able to read the summary box on a card statement and know which figure to pay.
Shu Ting got her first credit card when she started work. Each month the app showed her two numbers in large type: a statement balance of S$1,840 and a minimum payment of S$50. The minimum was in a box with a "Pay now" button under it. She assumed that was what she was meant to pay, and for three months that's what she paid.
Nothing on the screen told her she was wrong. The bank showed her the minimum because it's the smallest amount that keeps the account in good standing, and that's useful information. It's just not the amount most people should pay. This lesson teaches you to read the summary box on a card statement and know which figure is the one that matters.
Every card statement has a summary near the top, either as a box on the PDF or as the first screen in the app. It usually shows:
the statement date, which closes the billing cycle the cycle dates, showing which period of spending the statement covers the previous balance, payments received and new charges in the cycle the statement balance the minimum payment due the payment due date the interest rate that applies to purchases, and often a separate one for cash advances
The layout varies by bank, but those items are on all of them. Find each one on your own statement before you read further.
The statement balance is the total you owed when the cycle closed: everything you spent in the period, plus anything carried from before, minus payments and refunds.
On most cards, paying the full statement balance by the due date means you pay no interest on purchases for that cycle. This is the interest-free period, and lesson 2.1 of Credit and debt: scores, cards, loans and BNPL, How the interest-free period works and how you lose it, explains how it works in full. For reading a statement, the rule is simple. The statement balance is the figure to pay, and the due date is the day it must arrive by.
Spending after the statement date doesn't count towards this statement. It goes on the next one. So your app's "current balance" may be higher than the statement balance, and you don't need to pay that higher figure yet to avoid interest.
The minimum payment keeps the account in good standing. Pay at least that much by the due date and you avoid a late fee, and the bank doesn't treat the account as overdue. That matters, because late payments can be reported and affect your credit record.
But the minimum doesn't clear the debt. Everything you don't pay stays on the account and charges interest. Here's Shu Ting's first month, with an example interest rate of 26% a year. It's only an illustration, and your card's rate is on your statement. She paid S$50 of S$1,840, leaving S$1,790. A month's interest on that at 26% a year is S$1,790 times 26%, divided by 12, about S$38.78. A single month's interest came to more than three-quarters of her S$50 payment.
Lesson 2.2 of Credit and debt, Why the minimum payment keeps you in debt for years, shows what happens if you keep paying only the minimum. The short version is that it can take years and cost far more than the original spending.
Paying more than the minimum but less than the full balance helps, since you owe less and so pay less interest. It doesn't bring back the interest-free period, though.
On many cards, once a balance is carried, new purchases attract interest from the day you make them, with no free period, until the balance is cleared. So Shu Ting's groceries and train fares in month two were charged interest from the day she tapped. The exact rule depends on your card. Its terms and conditions say how interest is calculated and when the free period comes back.
That's why paying "most of it" isn't a safe middle ground. If you can't pay in full this month, it's worth knowing what that does to next month's spending as well.
The statement shows the interest rate that applies to your card, and often a different rate for cash advances. The bank sets the rate, and it can change it with notice. So read the rate on your latest statement, not the one in the brochure from when you applied.
Then look at the dates. The due date is what matters for avoiding interest and late fees. Payments take time to reach the bank depending on how you pay, so a payment made on the due date itself may arrive too late. Your bank's website explains how long each payment channel takes.
When Shu Ting worked this out, she paid the full statement balance that month and set up a reminder three days before each due date. The interest stopped once the carried balance was cleared.
With your latest card statement open, the four figures to find are the ones in the summary box that decide what you pay and when. Have your phone's calendar or reminders app ready too.
On your latest card statement, circle the statement balance, minimum payment, due date and interest rate and set a payment reminder before the due date.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).