Purchase / Refund

Fluxie

Hello, Im new to this site and quite overwhelmed by the number of threads to try to look through.

When you pay additional money off a credit card i believe i am correct in thinking that it counts towards the highest interest gathering portion first.

And that most cards have so many days automatically interest free on new purchases.

e.g on my last bill it says

Interest free period
Up to 56 days for purchases only

So I wondered if when you buy something but then get a refund does that refunded money then count towards the interest gathering portion of borrowed money or does it just negate that you made a purchase?
And if it does go towards the interest gathering portion would "using" this be possible to reduce the amount of interest I have to pay. Or would it just cancel itself out anyway?

redpete

The interest-free period only applies if you pay off the full balance each and every month. If you haven't been doing this then interest applies from the date the purchase appears on the account.

You need to be careful about refunds. If the sequence is 1) make purchase, 2) monthly statement with purchase showing, 3) get refund - then some CCs don't count the refund as part of the payments off the balance on the statement, so you still have to make a payment for the full amount of the statement balance.

However, the refund would reduce interest from the date it appears on the account.

zerog

You must always pay the minimum on the statement. If you want interest free, you must always pay the full balance on the statement, even if there has been a refund.

The only exception is if the balance is completely cleared by the refund, before the due date, otherwise you risk charges.

bris

Refunds do not count as payments made to your account so it will just negate the purchase you made.