topic How do credit cards apply returns in Credit Cards

How do credit cards apply returns

Anonymous — Tue, 10 Dec 2019 02:49:13 GMT

Please forgive me if this is not the right place to ask this. And if not, could someone direct me to an appropriate site?

Anyhow... here's my situation/question (btw, this is in regards to an Amazon Chase credit card).

At the close of my October Statement (10/31/2019), i had the following balance

$600 in interest accruing charges
$200 in 0% APR Promotion Charge (due in August) of which I need to pay a minimum balance of $20

So a total balance of $800 of which I have to pay $620 to avoid interest ($600 interest acruing + $20 minimum payment on Promo)

November 1st started the new monthly statement cycle and I had the following activity:

Nov 5th, I made a purchase for $400
Nov 10th, I made another purchase for $300
Nov 12th, I returned the first purchase -$400
Nov 20th, I made my payment for the October Statement of $620
Nov 30th billing period closes.

Now, I expected to have a total balance of $480

$300 in new interest accruing charges ($400 + $300 - $400)
$180 left in the 0% Promo ($200 from Oct - $20 Minimm Payment).

Of which, I only expected to have to pay $320 to avoid interest ($300 + $20 Minimum)

However, what I wound up having was $480 in interest accruing charges and nothing left in the 0% Pomo.

I spoke with the credit card company and they told me what happened, is that Returns are counted as Payments to the previous billing cycle. So I actually made a payment of $1020 instead of $620 (My $620 + $400 Return). So of the "$1020 Payment" they applied $600 to my October interest accruing balance and $200 to the 0% APR promotion October balance and the remaining $220 carried over to the November Statement.

Does this seem right? (Legal?) An extra $180 isn't going to break the bank, but what if it was a promo for $5000 and I made a $5000 return? That would be a lot of money to shell out unexpectadly and it's not like I can just not return something that's defective.

Thanks all for any help/advice!!

Re: How do credit cards apply returns

chiefone4u — Tue, 10 Dec 2019 03:57:14 GMT

Somewhere in your Teems & Conditions it spelled out how this scenario would play out (the fine print has virtually any possible scenario spelled out).

For the reason you mentioned ($5,000 promo, with $5k return) is one of the reasons you have to be careful when spending on an account with an active promotional rate.

It is recommended by many if you are floating a 0% apr, you shouldn't be using the card for any additional purchases or BT's.

Re: How do credit cards apply returns

Anonymous — Tue, 10 Dec 2019 04:37:50 GMT

Thanks for the info. I couldn't find anything about this situation anywhere. I'm going to have to read my cardmember agreement. But honestly, it just seems like an unfair practice - and logically doesn't make sense. But what can you do, right?

Re: How do credit cards apply returns

Anonymous — Wed, 11 Dec 2019 04:13:24 GMT

Programs like Plan It or Flex Pay were meant to allow cardholders to use the card to carry a 0% (or low-interest) promo while still using the card for PIF monthly cycles. They specify how payments are applied, but adding returns into the mix requires an expert on the particular program, which a CSR might be the best to answer that. And your card agreement might also specify.

But if you are dealing with a 0% BT, then I wouldn't use the card for purchases. Sounds like you have one of those Plan It type of situations and it got complex due to returns.