Hmmm credit card refund conumdrum

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simax
simax Posts: 1,959 Forumite
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Hi all,

Keeping it brief:

If my balance is, say: £400 and my statement has been produced - if I get a refund of £250 to the account applied before the payment due date and I wish to avoid interest charges (I always pay in full usually) can I just pay the £150 remaining (ie: brings account to zero) or do I have to pay the £400 and put the account £250 into credit then request a BACS transfer?

I can do it either way, but a) I want to avoid interest and b) I don't want to annoy the credit card company by putting the account into credit by quite a large amount.

Ideas?
I spent 25 years in the mobile industry, from 1994 to 2019. Worked for indies as well as the big networks, in their stores also in contact centres. I also hold a degree in telecoms engineering so I like to think I know what I’m talking about 😂

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  • agrinnall
    agrinnall Posts: 23,344 Forumite
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    I know with my credit card any payment into the account before the due date is applied before they take the DD for the remainder of the full balance. However, I can't say whether all issuers do the same, so the easiest way for you to get a definitive answer is to ask your issuer rather than us.
  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
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    £150 will be OK, so long as it covers the minimum payment (and it will!).

    The only time you come unstuck in these situations is if the refund completely cancels out the purchase value. In such a case you'd still need to make a payment of at least the minimum shown on your statement. In effect, you'd then create a circa 1% (of the statement balance) positive balance.
  • simax
    simax Posts: 1,959 Forumite
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    £150 will be OK, so long as it covers the minimum payment (and it will!).

    The only time you come unstuck in these situations is if the refund completely cancels out the purchase value. In such a case you'd still need to make a payment of at least the minimum shown on your statement. In effect, you'd then create a circa 1% (of the statement balance) positive balance.

    Makes sense. It will effectively free up the refund immediately for me too.

    Thanks mate :)
    I spent 25 years in the mobile industry, from 1994 to 2019. Worked for indies as well as the big networks, in their stores also in contact centres. I also hold a degree in telecoms engineering so I like to think I know what I’m talking about 😂
  • StuC75
    StuC75 Posts: 2,065 Forumite
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    Be carefull as it can also matter what the previous balance may have been. And when that transaction was made & more importantly statemented to the account.

    In the most basic terms Refunds Do not Count as payments (since all it would need is someone to make a regular habit of buying and returning some items to count as the payment to 'abuse' this).. It only counts if it is the entire statemented amount - eg Spent only £250, then month efter it is refunded in Full before the payment due date - then no further is needed..


    If the prior month was Zero, 250 spend, additional amount spent within that statement. Month After £250 refunded (In time before the Due date, then yes paying the remaining amount (statement balance less refunded amount) ought to be sufficient and something you could query with the card company if it didnt work that way!..

    Where it gets grey is:
    1 - Does the refund actually get processed in time for the due dates..
    2 - Is the refund for the full original amount, if it less less other items (say not cancel full order) or shipping fees etc then the card provider may not treat as such..

    After all what it you spend £250 in month 1, then in month 2 spend a further £250 with the same retailer, but then have a refund \ credit applied for £250 with that retailer - how is the card provider to know if it was for the month 1 or 2 transaction...

    Worse case if you over pay and put account slightly in credit - is to then spend this buffer on further purchases...
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