question about refunds

[Anonymous]

I always get confused if refunds back to my card is considered a payment. Let's say my statement cut with $100 on 9/1/21. On 9/2/21, i make a payment of $20 to the card and I get a refund of $80 for an item i returned. Does this combined $20 and $80 constitute as me making a full payment of the $100 statement? To my understanding, as long as the amount of credits/payments equals the statement balance, i should be okay, right? thanks

[coldfusion]

It can depend on the issuer but you should expect that you will still be required to make the mininum payment on that $100 balance as called for in the statement.   As an example if the specified mininum payment for that statement was $30 you would still need to make that $30 payment, even though you got the $80 refund, to avoid a late fee and penalty APR.

[Taurus22]

From my experience, lenders don't typically accept alternative deposits as minimum payment requirements. Just as using cashback as a statement credit.....although it is applied to your balance, it still usually states clearly that you must make the minimum payment due and the credit does not apply to that minimum.

I've always found it best to pay the minimum regardless of additional credits, even if those credits puts my balance in the "positive" after statement cuts. That just means my next month's balance is already reduced from the start, if that makes sense...

[SUPERSQUID]

A few months ago i had that exact thing happen to me. in my case the vendor credited my card with the return and the cc company just reduced my balance on the card for the amount of the return. i would guess if you didnt have enough balance to offset the return they would mail you a check. in my case they didnt figure the return in any payment due, they just reduced my balance.

[Anonymous]

Okay, lets change the scenario. Let's say the statment cut with $100 again and this time, I make the min payment of $30. The refund for the return happens to be $70. In this instance, will i have 'paid off' my statement balance of $100 or will i still be charged interest if my APR isn't 0%? thanks again

[SUPERSQUID]

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@Anonymous wrote:

Okay, lets change the scenario. Let's say the statment cut with $100 again and this time, I make the min payment of $30. The refund for the return happens to be $70. In this instance, will i have 'paid off' my statement balance of $100 or will i still be charged interest if my APR isn't 0%? thanks again

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I think the cc will reflect you made the minimum payment of 30 and take the 70 off your balance but not as a payment. at least thats what happened to me. i dont think you will be hit with interest.

[coldfusion]

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@SUPERSQUID wrote:

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@Anonymous wrote:

Okay, lets change the scenario. Let's say the statment cut with $100 again and this time, I make the min payment of $30. The refund for the return happens to be $70. In this instance, will i have 'paid off' my statement balance of $100 or will i still be charged interest if my APR isn't 0%? thanks again

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I think the cc will reflect you made the minimum payment of 30 and take the 70 off your balance but not as a payment. at least thats what happened to me. i dont think you will be hit with interest.

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Correct.

[Shooting-For-800]

I would always assume that it does not go towards payment; not worth the risk or complication.

[Taurus22]

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@Shooting-For-800 wrote:

I would always assume that it does not go towards payment; not worth the risk or complication.

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Yep, this is exactly the point I was making earlier.  It's not worth the risk of complication. It's best to always meet the minmum payment just to avoid any strange transaction crossover.

@Anonymous   So, in the 2nd scenario you outlined, you met the minimum $30 payment required, so your monthly obligation was met. The $70 refund (or other credit to the account) would then in effect "pay off" your remaining balance and, barring any additional spending, your next statement would show $0 balance.

[SoCalGardener]

I've always considered refunds just another transaction, not a payment. And I definitely would not factor in a credit as part of that month's payment. Even if the credit reduced my balance to less than the minimum payment, I'd still make the minimum payment. No, I'd probably contact the bank and ask! In that scenario, it may be different.

Bottom line, what's been said upthread is how I've always thought about refunds, i.e., don't consider them payments. If you should be in a position where a refund leaves your balance less than your minimum payment, either make the minimum or contact the bank to clarify--and make sure you make notes of who you spoke to, the date and time, etc.