Credit Card Statement Balance

Understanding Your Credit Card Statement Balance

Credit Card Statements are Logically Organized

Like a lot of financial paperwork credit card statements seem to come at you with a lot of information, but if you know how to read them then you’ll find that they have lots of useful information organized in a logical way.

Credit Card Statement Balance Summary

Your credit card statement will have a summary of your account’s activity for the past month.  Following is an example of how it’s organized along with an example of what each line item means.

DescriptionAmountExplanation
Previous Balance (or Beginning Balance)$1,880This is the ending amount from your prior credit card statement that carries over to the current month.  In other words, it should be equal to the “New Balance” on your lastcredit card statement.[1]
Less: Payments and Credits($225)This is the amount you paid on your credit card the prior month.  It can also have miscellaneous credits such as refunds from store returns.
Add: Current Charges$375This is the total amount of your credit card purchases during the past month (which ties to the “Summary of Current Credit Card Charges” below).
Add: Finance Charges$20This is the current month’s interest that you owe on your outstanding credit card balance.
Add: Fees and Penalties$10This is where charges will show up for things such as annual fees, late payment fees, penalties for exceeding your credit limit, etc.  If you don’t understand why you were charged this amount then contact your credit card issuer.
Equals: New Balance (or Ending Balance)$1,060This is the sum of your outstanding balance from the previous month ($1,880), less payments you made ($225), plus interest and fees ($20 and $10), plus amounts charged for the month ($375).  The total ($1,060) represents the amount you would need to pay in the current month to settle your credit card balance in full (though you can pay less than that all the way down to the minimum payment which is described below).

Summary of Current Credit Card Charges

In addition to summarizing the activity in your account, your credit state statement will provides details for all of the charges that you made in the past month.  Examples of such charges are as follows.

DescriptionAmountExplanation
Crash and Bash Auto$245This was a one-time charge to cover a car repair.
See-it-Again Movie Rentals$20This is a recurring monthly charge for a subscription-based movie rental service.
Forgotten Fine Dining$55You charged this amount at a restaurant, but you’d forgotten about it until you got your credit card statement.
Phantom Industries Nonrecurring Charge$40This is a charge that you don’t recognize.  You should search your records to determine what it is and, if you can’t figure it out, you should call the company (their number or website should be on the credit card statement).
Nasty Surprises Incorporated$15This is a charge from a company you recognize and have dealt with in the past, but for reasons you don’t understand they’ve charged you unexpectedly.  You should call the company to find out why.
Equals: Total Charges for the Month$375This is the sum of the above amounts, and it ties to the “Current Charges” line on the “Credit Card Statement Summary” above.

Rewards Summary

If you have a rewards credit card where you accumulate points, flight miles, or other incentives then you should see a summary of your rewards activity on your statement organized something like this:

The minimum payment and the due date

Your credit card will always show you your minimum payment, or the lowest payment the credit card issuer will accept by the due date without penalizing you according to the terms of your credit agreement.  Depending on terms of your credit agreement you can expect your minimum payment to be between 1% and 4% of your current balance.  So based on the figures in the example above if your minimum payment percentage was 3% then you would have to pay at least $32 by the due date in order to avoid late payment penalties ($1,060 x 3% rounded up to the nearest dollar).  Again, you can always pay more than the minimum payment, but you have to pay at least that much.

3 Key Things to Look for When Examining Your Credit Card Statement

Now that you understand the fundamental of reading your credit card statement I want to reemphasize 3 points that I alluded to above.

  1. You should recognize all vendor charges – Nobody should charge your credit card unless you give them express permission to do so.  Thus if you see a charge from a company you don’t recognize, you should follow up to see if it’s legitimate.
  2. Vendor charges should be accurate – Once you’re sure that nobody unexpectedly charged your credit card, you should then make sure that you were billed the right amount for each transaction. If not then you should find the paperwork for the applicable charge(s) and contact the company directly to resolve the problem (their phone number and/or website should be on your credit card statement or the receipt from the transaction).
  3. Your credit card company’s charges should be correct – You should understand both the rationale and amount behind all credit card interest, fees and charges.  If you see anything that look unusual, inappropriate, inaccurate or excessive then don’t hesitate to contact your credit card issuer to get some answers.


[1]  To further illustrate, if $1,880 was the “New Balance” or “Ending Balance” on your November credit card statement it should also be the “Previous Balance” or “Beginning Balance” on your December credit card statement.

Types of Businesses Entities

Types of Businesses – Business Entities

Are You Currently Without Limited Liability Protection? It May Be Time to Consider Incorporation.

Different Types of Businesses – Suppose you are giving basketball lessons in your driveway for $5 an hour. You don’t file paperwork with the state and don’t share business with anyone else. If a student breaks his leg while attending a lesson, your personal assets are not protected if the student were to take legal action. The same goes for a general partnership. If you and your best friend jointly operate a corner candy store without signing any agreement between you and without filing any documents with the state, your business would be considered a general partnership.

If you default on loans for the business, you would be personally responsible for paying the debts. Whether you are set up as a sole proprietorship or a general partnership, you are personally and fully liable for all business debts. Thus, personal property could be taken to pay those debts. So what can you do to protect yourself financially? We’ll cover the different types of businesses and help you decide, which is right for you.

Limited Liability Protection – Types of Businesses

Brief descriptions of ways to incorporate your business are featured below. These descriptions also include limited liability protection parameters essential to protecting your personal assets.

C Corporations and S Corporations.

Both C corporations and S corporations are legal entities that exist separately from their owners. They are sometimes called for-profit or business corporations. A C corporation is simply a standard business corporation. It is called a C corporation because it is taxed under subsection “C” of the IRS code. An S corporation is a C corporation that has made an optional election to be taxed under subsection “S” of the IRS code. Corporations offer business owners (called shareholders or stockholders) limited liability protection. This means that the owners are not held personally liable for the debts and obligations of the company unless they are proven to be personally negligent. The liability of the owners is typically limited to the amount of money they have invested in the corporation. To find out more about S Corp vs C Corp.

Limited Liability Company.

Commonly referred to as “LLCs,” limited liability companies are for-profit legal entities that exist separately from their owners. The first LLC was introduced in 1977 so it is a newer entity, blending key features of a corporation with key features of a sole proprietorship or general partnership. LLCs offer limited liability protection to the owners and pass-through taxation. Read more about Corporation vs LLC

Professional Corporations and LLCs.

A special type of corporation or LLC is reserved for those companies that will engage in a learned profession such as law, medicine, architecture, engineering, etc. They are usually referred to as a Professional Corporation (PC), Professional Association (PA) or Professional Limited Liability Company (PLLC). In many states, only one profession can be offered in a professional entity. The liability is the same as standard corporations and LLCs.

Limited Partnership.

A limited partnership (LP) is a partnership owned by two classes of partners: general partners and limited partners. General partners manage the enterprise and are personally liable for its debts. Limited partners contribute capital and share in the profits but typically do not participate in the management of the enterprise. Another noteworthy distinction between the two classes of partners is that limited partners sustain no personal liability for partnership debts beyond their capital contributions. In an LP, at least one partner must be a general partner with unlimited liability, and at least one partner must be a limited partner whose liability is limited to the amount of his or her investment. Limited partners enjoy liability protection much like the shareholders of a corporation or the members of an LLC.

Limited Liability Partnership.

A limited liability partnership is an existing general partnership or limited partnership that elects to have all partners receive limited liability for business debts. It is commonly referred to as an “LLP.” All partners receive limited liability protection. In many states, this liability protection is less than what LLCs or corporations receive.

Non-profit Corporation.

A non-profit corporation is one that is organized for a charitable, civil, religious, social, etc. purpose. It is organized for the “greater good” and not for the purpose of making a profit. These corporations are also referenced as “not-for-profit corporations.” As far as liability is concerned, non-profit corporations offer limited liability protection.

You may also want to seek the legal advice of your attorney in making your determining which different types of companies (business entities) is right for you.

Corporation vs LLC

Corporation vs LLC: Some Corporation Benefits to Consider

For many business owners, the decision between incorporating your business as a corporation vs LLC (limited liability corporation) may be a difficult one. Developing a laundry list of pros and cons may be helpful in clarifying which incorporation type will best benefit you. Remember that the decision you make may have different ramifications in the future.

Is forming a corporation the smart choice for you?

For some business owners forming a corporation vs LLC can be the better decision. Corporations are a separate legal entity owned by shareholders. For this reason, shareholders cannot be held personally responsible for the debts of the corporation. Your personal liability is typically limited to the amount you invested in the company. The worst fears of an investor is to risk losing more than he or she invests in the company. This can be a wise choice when trying to minimize your exposure.

Another reason you may wish to form a corporation vs LLC, is that your business can have many investors. This will allow you the ability to raise money from the public. Having an LLC can beneficial if you are not going to have many investors. In some cases, the investors are the ones who can get a company up and running and keep it going. If you form an LLC, this is not a viable option.

Lastly, if you form a corporation vs LLC your business might be able to bring in new employees by offering stock options. If you form an LLC you would not be able to do this, as they do not have stocks. With an LLC, employees can be offered membership interests. This is not the same as being offered stock in the company and can also be an awkward process to complete.

Corporation vs LLC which is right for you?

So, if you are thinking about forming your business as a corporation vs LLC, therefore you may want to consider using an incorporation services provider. Using a company that specializes in incorporation services can provide you with peace of mind. Since you know that they are experts in the ins and outs of incorporation. To find out more about the benefits of using an incorporation service provider read How to Incorporate.

How To Incorporate Your Business

How To Incorporate Your Business? Factors To Consider

There are many pros and cons that factor into forming a corporation or limited liability company (LLC). That’s why its important to investigate and research the laws and policies relative to your specific business goals and business type to fully maximize the benefits of incorporating. Here are some criteria to keep in mind when learning more about incorporating your business. We’ll also cover how to incorporate your business.

Incorporating Your Business

“How to incorporate your business?” The protocol of incorporation is usually the same incorporation process across the states.

These basics include:

  • Selecting your business name
  • Recruiting and/or appointing members/managers (LLCs) or director(s) (corporations)
  • Selecting your incorporation type
  • Filing incorporation paperwork
  • Opening a bank account for your business

Additionally, these other factors are helpful in determining which incorporation type is best suited for your business:

  • Businesses providing professional services. If providing a licensed, professional service, consider forming a professional corporation or a limited liability partnership. It is advisable to contact your licensing board to determine your requirements. Professional corporations (PCs) are allowed to be formed as are professional limited liability companies (PLLCs).
  • Initial report and business license requirement. Requires corporations and LLCs to file an Initial List of Officers/Directors and Business License on or before the last day of the month following incorporation.
  • Federal tax identification number (EIN). Corporations and LLCs that have employees are required to have a Federal tax identification number (EIN). Additionally, an EIN may be required to open a business bank account.
  • State tax identification number. To do business in the states, a state tax identification number is necessary.
  • State S corporation election. Recognize the federal S corporation election.
  • Business purpose. Allows corporations and LLCs to be formed for any lawful business activity. There is no need to state the corporate purpose in the Articles of Organization or the Articles of Incorporation.
  • Stock. Corporations can purchase, sell, hold and even transfer shares of their own company stock. However, corporations are required to list authorized shares and par value in the Articles of Incorporation. An increase in the number of shares or par value can affect initial filing fees.
  • Registered agent. Corporations and LLCs must list the name and address of a registered agent with a physical address (no post office boxes). The registered agent must be available during regularly scheduled business hours to accept important legal and tax documents for the business.

Many entrepreneurs and small business owners enjoy the benefits of having their companies incorporated. Just keep in mind that consulting with an attorney or accountant helps clarify if these benefits will work for your business type and goals. Learn more about the Different Types of Businesses.

S Corp vs C Corp

S Corp vs C Corp

S Corporation vs
C Corporation ?

Both C corporations and S corporations are legal entities that exist separately from their owners. They are sometimes called for-profit or business corporations. A C corporation is simply a standard business corporation. The reason it’s named “C Corporation” is because it is taxed under subsection “C” of the IRS code. An S corporation is a C corporation that has made an optimal election to be taxed under subsection “S” of the IRS Code. This article will help you better understand a S Corp vs C Corp. Read on to learn more about the advantages and disadvantages of both types of corporations.

Defining C Corporations

The C corporation is the most common business structure. A corporation is a separate legal entity owned by its shareholders. As a result, it protects its owners from personal liability and corporate debts and obligations. A corporation’s directors, officers and shareholders must witness particular formalities in a corporation’s administration and operation. For example, decisions regarding a corporation’s management must often be made by formal vote and must be recorded in the corporate minutes. Meetings of directors and its shareholders must be properly noticed and must meet quorum requirements. Finally, corporations must meet annual reporting requirements in their state of incorporation and in states where they do significant business.

Taxation is a significant consideration when choosing a business structure. Unlike a partnership that allows “pass-through” taxation, a C corporation is taxed as a separate legal entity. If the corporation distributes profits to the shareholders in the form of dividends, shareholders pay income tax on those distributions; thus, commentators criticize C corporations as imposing “double taxation.”

As with any business entity that offers liability protection to its owners, a corporation must be created at the state level. A corporation begins its life by filing articles of incorporation (sometimes called a certificate of incorporation) in the appropriate state and paying the necessary filing fee.

Advantages of C corporations

  • Typically shareholders are not personally responsible for the debts and liabilities of the business.
  • C corporations can have an unlimited number of shareholders.
  • Ownership is easily transferable through the sale of stock.
  • Corporations have unlimited life extending beyond the illness or death of the owners.
  • Certain business expenses may be tax-deductible.
  • Additional capital can be raised by selling shares of the corporation’s stock.

Disadvantages of C corporations

  • C corporations may incur double taxation.
  • Corporations are more expensive to form than sole proprietorships and partnerships.
  • C Corporations face ongoing state-imposed filing requirements and fees.
  • All C Corporations face ongoing corporate formalities, such as holding and properly documenting annual meetings of directors and shareholders.

Defining S Corporations

An S corporation is standard corporation after filling for a S corporation status with the Internal Revenue Services. The S corporation’s tax election adopts pass-through taxation – thereby sidestepping the double taxation burden borne by C corporations. Much like a partnership an S corporation files an informational tax return, but the entity pays no tax. The shareholders report their share of the S Corporation’s profit or loss on their individual tax returns.

Advantages of S corporations

  • S corporations are not taxed at the entity level – profits pass through to owners.
  • Shareholders are typically not personally responsible for the debts and liabilities of business.
  • S corporations have unlimited life extending beyond the illness or death of owners.
  • Certain business expenses may be tax-deductible.
  • Additional capital can be raised by selling shares of the corporation’s stock.

Disadvantages of S corporations

  • The IRS imposes restrictions on S corporation shareholders. This requires there to be less than 100 shareholders. The shareholders must be individuals, estates or certain qualified trusts; and cannot be non-resident aliens.
  • S corporations can have only one class of stock (disregarding voting rights).
  • All shareholders must agreement in writing to the S corporation election.
  • S corporations are more expensive to form than sole proprietorships and general partnerships. They also face continuous, state-imposed filing requirements and fees.
  • A few states do require a state-level filing for the entity’s S corporation status to be recognized by the state.
  • S corporations deal with continuous corporate formalities, such as holding and properly documenting annual meetings of shareholders and directors.

You should now have a better understand of a S corp vs C corp. When you compare a C corporation vs S corporation there are lots of things to consider. No matter which direction you take when it comes to incorporating your business in you should fully understand all of the legal entities and decide, which one will work best for your business.