How does a refund to a credit card work?

Eternal1

I bought something using my credit card which I think I've already been billed for but today I got a refund for that item which has been sent to my credit card.

Is there anything else I have to do? Or will the credit card company in turn send back that money to me or something?

Willing2Learn

The return transaction will simply be credited to your card account as a credit transaction. There is nothing that you have to do.

dresdendave

It will just appear on your statement as a refund. For example if you have spent £500 that month and then have a £200 refund your statement balance would be £300.


No need to do anything unless the refund puts the card in credit and you are not planning to use the card anymore.

Eternal1

dresdendave wrote: »

It will just appear on your statement as a refund. For example if you have spent £500 that month and then have a £200 refund your statement balance would be £300.


No need to do anything unless the refund puts the card in credit and you are not planning to use the card anymore.

It's an Amazon newday card so I will use it again but probably not for a month or so. So when the money goes back onto my card and I spend it, it won't come out from my bank account on the next statement? After all the amount they've refunded me has already left my bank because I paid my statement in full.

eDicky

The refunded amount is your own money, not part of the credit being lent to you which needs to be repaid. So it's yours to spend, or to offset the balance amount on your card, if any.

20SmthngSver

It just puts you in credit.

Say you're limit is £1000. You buy something for £50, and pay your credit card when it's due. You return it a week later and you get refunded £50. It will show a credit balance of £1050.

The next week you buy something for £60. When your statement comes in, you will only need to pay £10, as your was already £50 above your credit limit and so it counts towards it.

TadleyBaggie

20SmthngSver wrote: »

I
The next week you buy something for £60. When your statement comes in, you will only need to pay £10, as your was already £50 above your credit limit and so it counts towards it.

That is the most misleading post I have seen for a long time. At no point was the account "above" the credit limit (which would be a bad thing).

Terry_Towelling

Eternal1, it sounds like you do not have any outstanding debt on your card at the moment, so what follows is based on that.

The refund will be processed to your account and will just sit there doing nothing but putting your account in 'credit'.

If you don't plan on using the card again, you can ask your issuer to send you the value of the credit (probably as a cheque).

If you do plan on using the card again, you can use the credit balance to off-set against your new spending (which is sort of what you were saying) and your bank won't ask you to make any payments towards your credit card account until your new spending exceeds the value of the credit balance.

20SmthngSver

Meaning that if you have a credit limit of £500 and you're refunded £10, you're in credit by £10. Above your credit limit isn't necearrily the same as going over your credit limit. As such, your limit for that month has gone to £510, which is how much you can spend without having to make a repayment.

The £10 wouldn't mean you're below your credit limit and wouldn't mean you've gone under it.

Anyway, I'm sure people know what I mean :beer: I don't think your response was quite necessary but you're entitled to your opinion! I don't think you read it properly

Terry_Towelling

I guess it is possible to view the issue in terms of credit limits and credit available. If you did have a £1000 credit limit, a zero balance and were given a £50 refund, you would have £1050 available credit (or access to £50 more than your credit limit).

At this point you can tell yourself that until your 'available credit' is less than your 'credit limit' you won't have to pay anything to your card company.

Personally, though, I wouldn't choose to view it that way because it is coming at it from a very unusual direction.

The simple answer is that you only have to pay your card company when they produce a statement telling you that you do.