What to pay on a CC when expecting a refund?

[Peach8321]

Hi everyone - 

So I recently charged quite a bit on my card, because I wanted to try on some shoes - and now I'm returning them (yay for free shipping and free return shipping for difficult shopping!).  However, I won't be sending them out until Wednesday and the CC bill is due tomorrow - with the shoe cost on it. 

So, since I always pay the full amount on the card, I paid the full amount.  However, they said a refund will be applied to the method of purchase in 1-3 weeks.  So does that mean my card will then have a "negative" balance on it?  It's a USAA card....

For the future, should I only pay the statement balance if I'm expecting a refund before the full amount is due?

I hope that makes sense, I can give numbers and dates if necessary...

Thanks!

[DI]

It means you'd have a credit balance.    Yes, whenever you're expecting a refund either pay minimum due or statement balance.

[GregB]

Since you said you always pay the full amount, I assume you wish to avoid paying interest. You would need to pay the statement balance. A future expected refund would be irrelevant. That is part of the next statement. Actually, if the last statment is due tomorrow, the statment after that is likely to close soon and a return is likely to be on the following statement.

Regardless, if you wish to avoid interest each statment balance needs to be paid in full by the due date. An expected refund would not change anything.

[Anonymous]

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@GregB wrote:

Since you said you always pay the full amount, I assume you wish to avoid paying interest. You would need to pay the statement balance. A future expected refund would be irrelevant. That is part of the next statement. Actually, if the last statment is due tomorrow, the statment after that is likely to close soon and a return is likely to be on the following statement.

Regardless, if you wish to avoid interest each statment balance needs to be paid in full by the due date. An expected refund would not change anything.

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+1    I agree!

[BoSox617]

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@Peach8321 wrote:

So, since I always pay the full amount on the card, I paid the full amount.  However, they said a refund will be applied to the method of purchase in 1-3 weeks.  So does that mean my card will then have a "negative" balance on it?  It's a USAA card....

For the future, should I only pay the statement balance if I'm expecting a refund before the full amount is due?

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Hi Peach8321,

IME returns take a while to process (sometimes longer than advertised), so I pay the full card balance (not necessarily statement balance, because I want $0 to report).  I track exactly how much of a refund I should receive in my budget (and approximately when I should receive it), so that I won't forget about it.

Once the return is processed, a credit transaction will appear on your card.  If a statement cuts with a credit balance, a $0 balance should report for that card that month (assuming your card reports statement balances to the CBs). 

A lot depends on what you're trying to do - are you trying to avoid interest, trying to ensure that $0 balance reports?  Either way, chances are that the return processing period will exceed the grace period, so I would pay it and await the refund. 

Best of luck!

[Peach8321]

Hmm...so what y'all are saying is that, since I paid it all, when the refund hits, I'll have like -$850 on the card and then as I spend, that will reduce the balance up until $0 again before I need to pay anything else on it?

Like Bo, I like to see a $0 report, since I have other cards that I have no choice about reporting a balance (even though its PIF).  Thus, I always pay the full card balance.  I guess this means I'll just loose the interest and not have to pay anything for awhile.

Thanks!

[john398]

Any credit balance reportds $0 on your credit report

[BoSox617]

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@Peach8321 wrote:

Hmm...so what y'all are saying is that, since I paid it all, when the refund hits, I'll have like -$850 on the card and then as I spend, that will reduce the balance up until $0 again before I need to pay anything else on it?

Like Bo, I like to see a $0 report, since I have other cards that I have no choice about reporting a balance (even though its PIF).  Thus, I always pay the full card balance.  I guess this means I'll just loose the interest and not have to pay anything for awhile.

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Hi Peach8321,

IME, yes.  I overpay some of my cards at times to ensure a $0 balance - when my statement cuts, no payment is due. 

Would you make up this credit balance in a month or two?  Some folks have reported that their cc will mail them a check if they carry a credit balance for a while (a few months, I'm not sure).  You may want to call your cc to find out what may happen if you don't use up the credit balance right away.

Good luck!

[Peach8321]

Bo, thanks for the tip - no, I don't normally spend that much in a month (or even like, 6 months) so I will contact them once it is all settled out and super negative and ask what the next step is.  The card is a USAA MC so I don't know if USAA is better or worse at sending a check versus carrying a negative balance - maybe they will just put it back into the account I have with them.  

And I didn't know it said "$0" and not negative, so thanks for that as well John!

[mauve]

If I remember right, when I've had the over-paid card, it reported to the bureaus as $0 and on the cc's account page as the actual balance....but I think mint didn't quite get it and so said that my available credit was lower.  Like, if I had a -$100 balance on a $1000 limit card, it was reporting my available credit as $900 instead of $1100 or $1000.  Usually you don't have to bother them to get them to cut you the check, either - it just automatically happens after a few statements with that balance continuing to be there.