PAying off entire balance - what if theres a refund?

[Deleted User]

OK. Sake of argument £5000 owing on credit card statement.

£200 then gets refunded from a purchase. Do I then have to only pay £4800 to ensure the balance is paid off - yes I know it sounds obvious..... BUT do refunds count like this or do you still have to pay the full £5000?

matty_544

[quote=[Deleted User];discussion/5323457]OK. Sake of argument £5000 owing on credit card statement.

£200 then gets refunded from a purchase. Do I then have to only pay £4800 to ensure the balance is paid off - yes I know it sounds obvious..... BUT do refunds count like this or do you still have to pay the full £5000?[/QUOTE]

Depends on the CC provider, my halifax CC doesnt count refunds but my nationwide one does

MisterBaxter

If the refund takes the balance back down to £0 then you wouldn't be expected to pay any more off as your account would then be in credit. If you had already paid down the account to £0 and a refund came in you could either ask the CC company to transfer the credit to you current account or just re-spend it.

Based on comments it would appear that some CC companies don't count refunds towards your minimum monthly payment so if your minimum payment on a statement was £50 and you had a £50 refund you would still have to pay the minimum payment on the statement so in effect you would have reduced your bill by £100.

molerat

Cap1 and Santander count refunds against min payment and full balance. MBNA will still take min payment even if balance is paid off.

[Deleted User]

molerat wrote: »

MBNA will still take min payment even if balance is paid off.

How can they take a payment, if the balance is zero :huh:

glentoran99

molerat wrote: »

Cap1 and Santander count refunds against min payment and full balance. MBNA will still take min payment even if balance is paid off.

Bedsit_Bob wrote: »

How can they take a payment, if the balance is zero :huh:

Presumably this is direct debit? Id guess its because its called when the statement is produced

MisterBaxter

Bedsit_Bob wrote: »

How can they take a payment, if the balance is zero :huh:

Amex do this on their charge cards, I have personal experience of this when my account went quite a bit in to credit one month. It does seem odd and I had paid well in advance so there should have been time to pull the DD request for that months payment.

agrinnall

Bedsit_Bob wrote: »

How can they take a payment, if the balance is zero :huh:

Because they informed you on the statement that's what they'd do. If you think that is likely to happen to you and you don't like it then you'll need to look for a card issuer that takes into account refunds and reduces the amount of the DD accordingly.

[Deleted User]

Seems very complicated.....

I can why credit card companies stop refunds applying. You could have a £1000 balance to pay, the next month pay for something for £1000, then return it for a refund (so £1000 is paid into your account). So there we are £1000 paid this month in full. In reality nothing has been paid.

I do have £5000 outstanding on a cc. £500 of this was as a deposit for a holiday rental.

When I came home the £500 was refunded. What I don't want to do is pay £4500 and then find out, in effect, I haven't paid the full balance off. I guess I need to check t+cs. Probably safer I guess to pay the balance as per statement and ignore any refunds.

Assume part payment of, say £3000 balance transfer then another payment of £2000 would not be a problem?

MisterBaxter

If you have an outstanding balance of £5000, a refund of £500 and make a payment of £4500 you will have a £0 balance, if you pay £5000 after your £500 refund then you would have a positive balance of £500 which you can either ask them to credit to your account or use for next months spending.

The CC company may or may not take your minimum payment regardless of your balance which could put you further in credit.

Any payments made to your account will serve to reduce your balance whether that is cash, debit card, cheque or balance transfer, the refund will also count as a credit to your account.

PeacefulWaters

If you are currently paying interest pay the full £5k off.

If there's a refund that then puts your account in credit pay for your weekly shopping on the card until the balance is back to zero.