Interest free credit month after month?

aroominyork

Am I right that there is a way to keep delaying paying a credit card bill and still get charged no interest? When I buy and return something in the same bill cycle, it seems the credit card company counts the credit as a payment towards my bill. So say I have £1000 of purchases on my month end statement. Before the payment due date I buy something else for £1000 and immediately return it. The £1000 return credit is seen by the credit card company as a payment towards my £1000 bill so the bill is considered paid in full. Next month I receive the same £1000 bill and go through exactly the same process. Am I missing something here...?

grumbler

This, possibly, is the case for some CC providers, but definitely not for all. Many (most?) don't count the refunds as payments exactly for this reason - to close this potential loophole.

chattychappy

First of all, any "unusual" pattern of activity can be picked up by IT. The result could be that certain transactions could be declined, or you could even have your card cancelled. They are not stupid (unless you're talking millions, then banks can become a bit stupid!)

You refer to "bill cycle" in a different way to the way I would.

If you buy something and return it before a statement is generated, then there is no issue. But in your example, the refund hits AFTER the statement is generated.

I remember some reports suggesting that once a statement has been generated, you must pay at least the minimum in "real money", even if a credit is subsequently applied. I think the rule was something like the credit is applied first to the "non-minimum" payment of the balance. Eg if you have £100 outstanding, with £10 minimum payment then a credit of £50 would still mean you have to pay the £10. Only if the credit is for £100* do you not have to make any separate payment. This is to stop people buying something and returning it just to avoid a minimum (or doing as you suggest). I'm sure cards vary a bit and no doubt if it is something of this happens as an innocent "one-off" (eg if a refund was issued late), a lender could be pursuaded to refund interest/charges.

(EDIT *and that's all that is on the account... which catches the loophole. Ie if you have made subsequent purchases, then they won't apply it that way)