Your credit card statements show more than just how much you spent this month. They reveal your personality, financial health, lifestyle and possibly dirty secrets. Here’s how to use those statements as a self-diagnostic tool.
When you use your credit cards, the transactions are between you and the issuer. But if you ever need some motivation to check your spending, imagine your statements are available for all to see.
That actually happened recently to “The Real Housewives of Beverly Hills” cast member Erika Jayne. She allegedly charged roughly $14 million dollars worth of luxury items to her American Express card, while tipping below the standard gratuity – not a good look when her attorney husband is being sued for bilking widows, orphans and plane crash victims out of their settlement. Jayne quickly went from “it’s XXPEN$IVE to be me” to “it’s embarrassing to be me.”
The charges listed on your own credit card statements can be just as revealing – to you, hopefully, not the general public.
What do your credit card statements reveal about you?
If you’re like many people, you put the bulk of your expenses on the cards, so they tell a story. Use them for introspection, say the experts. When you do, you may understand yourself better, and can decide to maintain or adjust – so you really are happy to be you.
Dr. Ann Kaplan is CEO of iFinanceCanada, as well as a former cast member of “The Real Housewives of Toronto.” So she knows a thing or two about private information going public. She believes it’s wise to view your statements from the perspective of an outsider. What they may glean, you can glean.
Among the revelations, your credit card statements reveal:
How financially stable you are
One of the most important clues found on a credit card statement is your financial stability. “You may think you’re doing fine, but if you’re always close to the card’s limit and just pay the minimum, you probably aren’t,” says Kaplan.
Your account’s current balance and credit limit is on your statement. Compare those two numbers, since they are your credit utilization ratio. Owing less than 30% of your credit line on individual cards as well as your combined cards is ideal for credit scoring purposes, so if the limit is $1,000 and the balance is and remains above $700, it will look like you’re depending on credit to make ends meet.
Payment due dates also appear, of course. If a “past due” or “late payment warning” notification is on the statement, you appear to be in financial trouble, even if you just forgot to pay.
Jump over to the account summary portion of the statement. In addition to purchases, you’ll see a spot for cash advances. In general, it should be empty, says Kaplan, because withdrawing cash from your credit card can be very expensive. You’ll usually be hit with a fee of 3% to 5% of the amount you take out, and interest (sometimes at a higher rate than for purchases) will be assessed immediately. Evidence of an occasional cash advance may not be too alarming but a regular occurrence raises a red flag.
What kind of consumer you are
Take a dive into where you’re using your credit card, how often and in what increments, says Madison Block, spokesperson for American Consumer Credit Counseling. Your statements won’t indicate the exact items you bought, but the name of the merchant will be listed. For example, if you used your Discover card to charge a bunch of clothes at Macy’s, you’ll see the retailer and the total you charged but not the individual items.
“Maybe you’re consistently spending in a certain store and it’s resulting in debt,” says Block. “This is your opportunity to think and rework your budget. It’s also a chance to identify the places you should probably stay away from.”
How social you are
Now go deeper into your statements. You may find plenty of charges for things you typically do in groups, such as dining and drinking, concerts and sporting events. Alternatively your charges may be more centered on gardening, entertainment purchased through streaming services and home-cooked meals.
“If you spend a lot on bars, nights out with friends, just socializing in general, you’re probably more of an extrovert,” says Block. “If you spend more on take-out and movie rentals, maybe you’re more introverted or just like to spend time at home.”
Consider those charges and weigh them against what fulfills you, says Block. Examining your credit card statements this way can give you an opportunity to decide if you should make more of an effort to get out with friends or do the opposite. Take a moment to decide if these things and places truly make you happy and worth the cost. If not, mix it up.
How impulsive you are
Do new retail card statements arrive on a regular basis – because you can’t say no to a deep discount on that day’s purchases, so you always apply for the card at checkout? Or maybe you notice you routinely make a bunch of charges to a particular e-commerce site or home shopping network, all on a whim, late at night.
On the other hand, the majority of your charges may be for things that you really need and have thoughtfully purchased according to your budget. Your credit card statement can provide insight into how impetuous you may be. Sporadic unplanned purchases aren’t cause for alarm, but a substantial number in a month or over many months should give you pause.
“When you see your statements, you can ask yourself if the impulse purchase that led to a big balance was worth it in the end,” says Block. “If they’re appearing on your statements too often, take it as a sign. Consider waiting 24-hours next time you want to buy something out of the ordinary.”
How generous you are
Do crowdsourcing donations often appear on your credit card statement? What about gifts and picking up the dinner tab for your friends and relatives? If so, you can make a sound judgment about your generosity level.
While it’s wonderful to help others, if it’s resulting in unmanageable debt, you’re not helping yourself. Review your statements and then ask yourself why you’re contributing to somebody else’s cause before your own.
As for gratuity, you won’t see what you tipped a server or bartender, but if you use delivery services like Postmates and Doordash, your tips may be separate from the purchase. That’s partially what fueled public ire about Erika Jayne.
“We knew how much she was spending on luxury goods,” says Kaplan. “People could see she wasn’t generous, and that comes off as not being compassionate.”
Check your tipping habits, if they appear on your statements. Consider what outsiders would say about you, should those habits go before the court of public opinion (AKA, social media).
How honest you are
Finally, a credit card statement can uncover dishonest behavior. For example, there may be evidence you’re spending money on a lover when you’re married. Or, maybe you opened a credit card without your partner’s knowledge and have acquired debt you’re hiding. A 2020 creditcards.com poll found 44% of the respondents committed financial infidelity.
“Credit card statements are like scripts from a movie,” says Kaplan. “Did you charge a hotel room, or buy something in a part of the city you weren’t supposed to be that day? Your statements show your lifestyle and contain tip-offs when you’re doing something you shouldn’t be doing.”
The date, location and sometimes the time of your transactions will be listed. So, if your first thought is “This better not fall into the wrong hands,” as opposed to “I’m an open book!,” transparency may not be your strong suit.
Ultimately, the odds you’ll be caught by a spouse or partner are high. “Eventually you’re probably going to have to explain why a gift, meal, flight or hotel room is on your statement,” says Kaplan.
There is a wealth of data on credit card statements. Using them to reflect and improve makes sense. In some cases, the clues in your statements may contradict the image you want to project, or the person you hope to be.
For many people, reality stars included, credit card statements can be the last documents you want to be made public, says Howard Dvorkin, CPA and chairman of Debt.com: “What you spend and where you spend it is simply truth that can’t be spun. Even casinos take credit cards, so few vices are unrecorded. Unlike cash, detailed credit card records are always left behind.”
Don’t panic, though. Credit card statements are reflective of the past, not the future. “They’re snapshots,” says Block. “Look at them to know what you have been spending on, but also to find out when you may need help. If you don’t like what you see, that’s OK, you can change.”
That can include booking an appointment at an accredited credit counseling organization. Their experienced professionals have seen and heard all, so any transgressions or problems your statements reveal are unlikely to raise an eyebrow.