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Do you have filing cabinets stuffed full of old records, or a pile of paperwork on the kitchen counter that dates back six months? If you’re asking yourself how long you should keep credit card statements or other important documents, get some guidance below.
How long should you keep credit card statements?
It’s a good idea to keep credit card statements for one year. That’s true for bank statements and your paycheck stubs too. Here’s why:
- You may need the documents to verify information, such as whether you were charged for or paid for a service.
- Credit card and bank statements help you get a big picture of your spending habits, which can be important when setting up or evaluating a personal budget.
- When you’re filing your taxes, you can turn to these documents to verify business expenses or charitable donations.
- Statements can provide proof that you made a loan payment on time if you ever need to dispute a late payment.
When you first receive a statement, review it for accuracy before you make any payment and file the document away. The sooner you address an inaccuracy, such as a charge that you didn’t authorize, the better your chances are at getting the issue resolved.
One great thing about credit card statements, as well as bank statements and pay stubs, is that you don’t have to keep physical copies. If you have online access to the information, you can pull it up as needed. You may want to download and save copies of your statements, though, because in some cases, if you close your account, you may not have access to the information anymore.
What about other records?
Credit card and bank statements are far from the only financial paperwork most people deal with. Here’s a quick rundown of how long you should keep other types of documents.
Tax documents
You should keep a copy of your actual tax returns forever. You may need them in the future for reference or as supporting documents when you want to buy a home or take another action that requires proving your income.
All of the backup information that goes with your tax returns, such as W2 income forms and receipts, should be kept as long as there’s a potential audit window. You’ll need those documents if the IRS asks questions about your return. According to the IRS, it usually doesn’t go back more than six years, so you can probably toss supporting documents after that time.
Legal filings
Keep legal documents such as bankruptcy filings, lawsuits or motions forever. This is also true for documents related to major financial events with legal ramifications such as wills, powers of attorney or estate filings.
Utility bills and other receipts
Bills for utilities, insurance and other services don’t need to be kept very long. You can typically toss them within a month. If you paid the bill and have documentation that the payment cleared, such as a new statement reflecting the credit, you typically don’t have a lot of use for the old bill.
The same is true for most receipts. Unless you’re going to claim an expense on your taxes or want to hold on to the receipt in case you need to return something, you can usually toss a receipt as soon as you see the correct amount cleared your financial account.
How should you store your documents?
All of the above documents can contain sensitive information, so you want to store them in such a way that they’re kept confidential and private. You also want to ensure they’re as safe as possible from the elements and disasters involving fire and water.
The most important documents, such as your Social Security card and passport, you may want to keep in a fireproof, waterproof, locked safe. These are the types of documents that would cost a fair amount in time, money and hassle to replace.
For other documents, create a filing system in a filing cabinet or file box. Use folders so that you can easily find the information you need and make time at least once a year to go through the documents to purge items that are no longer necessary.
If you’re tech savvy, you can convert many of your paper documents to digital files. Do so by scanning them in and saving them on a cloud drive or an external hard drive. Some documents, such as legal forms, require original notarized signatures or stamped certificates for validity and may need to be maintained in paper copy.
How should you get rid of documents?
When you’re ready to get rid of old documents, shred them using a shredder for utmost security. Many times, the print on these types of documents is quite small. Simply tearing the paperwork up by hand doesn’t get the pieces small enough that information isn’t easily accessed or put back together by fraudsters.
Safeguard all of your information
Whether you’re dealing with physical paperwork or digital documents, take steps to safeguard your sensitive information. All an identity thief needs is a few bits of information, such as a Social Security number and address to start gathering enough information to take out credit in your name.
Use strong passwords for all of your accounts. That typically means a password that is eight characters or more and has upper and lower-case letters as well as numbers and special characters. Avoid using easy strings of information, real words and names.
Shred your paper copies and keep items out of public access. You should also check your credit reports regularly to ensure no suspicious activity is reported.
If you do find something odd on your credit reports or you just want a partner in monitoring your credit and keeping yourself safe from identity thieves, sign up for Lexington Law to learn more about our services.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
