topic Re: How do banks look at returns when it comes to usage? in Credit Cards

How do banks look at returns when it comes to usage?

masscredit — Mon, 13 May 2024 20:01:00 GMT

I'm wondering how banks look at returns when it comes to usage? For example, I was recently approved for an Apple Card when I purchased a new iPad from Apple. I decided to go with AT&T's offer which breaks the payments up over 36 months and no interest. Plus it doesn't count against my credit card utilization (that was the most important part for me). So I'm going to return the first iPad to Apple when it comes in. That will be a credit. That and my other charges for the month will post as the high balance for the card. A manual review from the issuer will see it as a return. But do they dig that deep or is it just shown as a credit? And on reports, it's just part of the high balance.

Re: How do banks look at returns when it comes to usage?

Snook_on_the_Line — Mon, 13 May 2024 20:19:56 GMT

Sounds to me like a good way to get your Apple Card account flagged for possible fraudulent activity. GS seems to be a pretty savy creditor, their internal fraud dept is bound to catch onto this game if they haven't already done so.

they also might just cancel the payment plan instead of crediting to your account balance seeing as how you didn't actually pay for the device out of your available credit.

Re: How do banks look at returns when it comes to usage?

SouthJamaica — Mon, 13 May 2024 20:30:30 GMT

@masscredit wrote:
I'm wondering how banks look at returns when it comes to usage? For example, I was recently approved for an Apple Card when I purchased a new iPad from Apple. I decided to go with AT&T's offer which breaks the payments up over 36 months and no interest. Plus it doesn't count against my credit card utilization (that was the most important part for me). So I'm going to return the first iPad to Apple when it comes in. That will be a credit. That and my other charges for the month will post as the high balance for the card. A manual review from the issuer will see it as a return. But do they dig that deep or is it just shown as a credit? And on reports, it's just part of the high balance.

I'm sure they do "dig that deep" and will see it for what it is.

Re: How do banks look at returns when it comes to usage?

Snook_on_the_Line — Mon, 13 May 2024 20:32:44 GMT

I read thru the Apple Card terms and conditions and didn't see anything at all about returns of items in payment plans.

just the standard boilerplate Your account may be closed by us at any time for any reason vagueness

Re: How do banks look at returns when it comes to usage?

masscredit — Mon, 13 May 2024 20:35:06 GMT

I didn't make the purchase to apply for the card then plan to return it if I got approved. I would have spend more than $1200 if I was going to do that. I origionally planned to order it from AT&T but they didn't have it listed on their site yet. I later went onto Apple's site to get more details. I then drifted into ordering one then applied for the card when I got to the payment portion. I figured I'd be denied when I did that. I tried a few times in the past and didn't get approved. I later kept thinking that I'd be carrying this balance for a year which would throw off my AZEO. Or, I could pay it off. At that point I decided to order from AT&T like I did with my other devices. And I've given the card close to $1K in usage besides the iPad that will be returned. So back to the origional question...

And I used my card as an example to explain my question.

Re: How do banks look at returns when it comes to usage?

Snook_on_the_Line — Mon, 13 May 2024 20:37:36 GMT

Did you read the full terms and conditions of AT&Ts 36month offer?
I'm sure there's a paragraph or two about returning the device in there somewhere

Re: How do banks look at returns when it comes to usage?

masscredit — Mon, 13 May 2024 20:45:18 GMT

@Snook_on_the_Line wrote:
Did you read the full terms and conditions of AT&Ts 36month offer?
I'm sure there's a paragraph or two about returning the device in there somewhere

My iPhone, iPad and Apple Watch were all purchased through AT&T using their 36 month plan. I used to buy them outright but figure why tie up the money when I can just break the payments up over 3 years with no interest. For the iPad I am replacing, I still owe $520. I paid that off with the Apple card when I ordered the new one from AT&T. I'll be able to sell it for at least that much which will pay it off (2022 iPad Pro).

Re: How do banks look at returns when it comes to usage?

Snook_on_the_Line — Mon, 13 May 2024 20:52:10 GMT

Ok back to the original question

the last time I returned something it was within the same billing cycle and the ccc credited the amount against my balance. Then the next month an adjustment was made to my rewards points balance automatically. (Removing the points I earned on the purchase)

so it definitely codes differently than a credit for a payment.

In your situation because the balance of the payment plan is not tied to your available credit, I don't think they will credit the refund to your balance.

and if they do I would expect it to be reversed in a month or so because the charge didn't have an authorization number from your card account in the first place.

Re: How do banks look at returns when it comes to usage?

masscredit — Mon, 13 May 2024 21:04:00 GMT

@Snook_on_the_Line wrote:
Ok back to the original question
the last time I returned something it was within the same billing cycle and the ccc credited the amount against my balance. Then the next month an adjustment was made to my rewards points balance automatically. (Removing the points I earned on the purchase)

so it definitely codes differently than a credit for a payment.

In your situation because the balance of the payment plan is not tied to your available credit, I don't think they will credit the refund to your balance.

and if they do I would expect it to be reversed in a month or so because the charge didn't have an authorization number from your card account in the first place.

I'm keeping the case that was ordered with the first iPad from Apple. The card will be PIF before the statement closes. Or, a slim chance I might just let the balance post then PIF. Either way, the return will be done before the closing date. I'm just looking at in general, when there is a purchange made that pushes the balance to the highest balance on the card then the item is returned, is that balance looked at by lenders as being the highest balance on that card that was paid? I'm not wondering this for any shady reasons. Just wondering how it works.

Re: How do banks look at returns when it comes to usage?

Snook_on_the_Line — Mon, 13 May 2024 21:09:20 GMT

So now I'm confused

That what I get for trying to do three things at once.

let me see if I understand this correctly

1. You have Apple devices that you still owed on

2. decide it's time to upgrade, so you app for the Apple Card during checkout. Approved

3. Purchase ipad#1 with card.

4. Purchase ipad#2 thru att payment plan.

4.5. Pay off old devices with card and make a couple other purchases. Now you have a balance including an iPad and a payment plan for an iPad.

5. Want to know if returning one iPad will be reflected on your reports as making an iPad sized payment to your card balance.

Did I get it right?

***edit***
just read the last post you wrote while I was writing this post

if you pif before the statement date the high credit on your report will be zero if this is your first statement.

Re: How do banks look at returns when it comes to usage?

Snook_on_the_Line — Mon, 13 May 2024 21:14:43 GMT

^^^see edit above^^^
the high credit number on your report is the highest statement balance reported to the credit bureau

I've spent 3k in a month on my cap1 card but payed it down to $55 every month before statement day so my high credit number on my report is $55

So in regards to the original question
yes. Returning most of the first purchase and having the credit post before statement closing date will have the same effect on uti as a payment.

Re: How do banks look at returns when it comes to usage?

masscredit — Mon, 13 May 2024 22:15:42 GMT

@Snook_on_the_Line wrote:
^^^see edit above^^^
the high credit number on your report is the highest statement balance reported to the credit bureau

I've spent 3k in a month on my cap1 card but payed it down to $55 every month before statement day so my high credit number on my report is $55

So in regards to the original question
yes. Returning most of the first purchase and having the credit post before statement closing date will have the same effect on uti as a payment.

Your reply before this one was on point. I just used my situation as an example. Highest statement balance is the key words. It's been awhile since I've really looked at my reports. Was thinking they say High Balance instead of High Statement Balance. That will change the way I pay some cards off. I'll be more likely to let a high balance for a month so show that useage.

Re: How do banks look at returns when it comes to usage?

dmFICO8 — Tue, 14 May 2024 03:39:17 GMT

It depends on how the FI will report. I have seen 4 categories:

Some FIs will use highest balance as Highest Balance: (positive = purchase, negative = payment/credit)

+200 -100 +150 -100 = 150

Highest balance is 250, 250 will be reported as Highest Balance and 150 is statement balance.

Some FIs will use total spend of the statement cycle as Hightest Balance:

+200 -100 +150 -100 = 150

Total spend is 350, 350 will be reported as Highest Balance and 150 is statement balance.

Some FIs will use end of month balance as Highest Balance and statement balance:

+200 -100 +150 -100 = 150

If last business day of the month stops after +200 -100, 100 will be reported as Highest Balance and statement balance.

Some FIs will NOT report Highest Balance, it remains 0.

Of course only new highest balance is higher than previous one, it will get updated, otherwise it will remain same.

My Apple card is new and limited data, but I can confirm it will fall in either first or second catagory because my Highest Balance was my purchase and I had some credit before statement date.