Retaining credit card statements

Credit card statements can often be simply thrown away or filed away. This is a mistake and they should both be read and retained.

Fraud protection measures rely on people reading their credit card statements.  The largest credit card providers offer a zero liability policy which means that a card holder does not have to pay for unauthorized or fraudulent transactions as long as the card holder tells the card provider in sufficient time.  This is a lot harder if it is only found out a couple of months later.

At the very least it is important to read the statement carefully when the statement arrives.  There is not only the chance that some fraud may be spotted on the credit card but there is also the chance to see where the money is being spent.

Credit card statements can be useful to back up expense claims.  Although almost all employer expense claim policies tend to insist on receipts, the use of credit card statement is allowed by many expense regimes, in practice if not in theory.  If there is any doubt about the receipt amount then a credit card receipt can back this up.

Another good reason for retaining credit card statements is to be able to examine spending patterns.  What a person thinks they spend on can be quite different from what is actually spent, and checking over a couple of months spending can be a very good idea.

It is also a good idea to keep credit statements as a back up for tax returns.  When keeping statements for tax purposes it’s also a good idea to keep the credit card statements in case there is a tax audit.  Most taxpayers should keep tax documents for five years, although this can change according to whether there are simplified tax affairs, disputes with the Australian Tax Office or some Capital Gains Tax claims.

When it has been decided to dispose of the credit card statements care should be taken with how they are disposed.  Credit card statements are very popular with identity thieves as they have a large amount of personal information on a couple of sheets.  These should be shredded when they are in paper form before being disposed.  If records are being kept on a computer then care should be taken to fully erase the hard disk of the computer as it is very common to take credit card details from a machine after it has been sold or given away.