How does a credit card refund work if I already paid the bill?
Credit card refunds don't count as payments toward your monthly bill. Instead, they're added to your account as a statement credit. If your refund has not been credited back to your account by the time your credit card bill is due, you'll still have to at least make the minimum credit card payment.
Getting a refund from a merchant is another way you might end up with a negative balance. If you pay off your balance before getting a refund or if the refund is more than your current balance, that refund will result in a negative balance.
Credit to Your Card: The refund will be credited back to your credit card account. This will create a positive balance on your card, essentially giving you a credit that you can use for future purchases.
When requesting money back, the merchant will generally credit the refund to your original form of payment, so if you paid by card, you won't receive physical cash back. Your credit card issuer will then post a statement credit to your account, effectively reducing your statement balance by the refunded amount.
Yes, credit card payments can be refunded. If you've made a payment but need it reversed, you can request a refund from the merchant or contact your credit card issuer directly to dispute a charge. Refunds typically appear as a credit on your credit card statement.
If you've overpaid your bill, you can either request a refund from your issuer or just let the negative balance roll over to your next credit card bill.
Banks will usually allow refunds to process successfully regardless if a card's been deactivated or the account's been closed. Refunds take 3-5 business days to appear in your account. Refunds can't be applied to an alternate payment method and will be returned to the card used for the original transaction.
For example, say you have a zero balance on your account after you pay your credit card statement. If your credit card company refunds an item that costs you $23, your refund amount may show up as -$23. All this means that you have more credit available in your account than your current credit limit.
The bank cannot issue an immediate refund as the request has to be authorized by the merchant first. Once the merchant approves your request, they will give their bank authorization to return the funds to your account. The process typically takes between 3–10 business days.
While most credit card refunds take 4 or 5 business days, it could actually take 2 to 90 days for a refund to show up on your credit card account. If more than 90 days go by without word from your credit card company, contact them and ask whether your refund is being withheld or disputed.
What happens when you get a refund on a credit card with zero balance Amex?
After you receive a credit card refund, you may notice a negative balance. While this may seem alarming, it's no big deal. In fact, it's a good thing as it means that you don't owe the credit card company any money. Instead, the credit card issuer owes you money.
| Paid with | Credited within | Refund to |
|---|---|---|
| Cash or check | Immediate | Cash |
| Credit card | 10 business days | Same credit card or gift card |
| Debit card w/ PIN | 7 business days | Same debit card, gift card or cash |
| Refund credit | 3 hours | Refund credit |
In most cases your refund will automatically go back to the original form of payment used for the purchase. If you used multiple forms of payment, your refund may go back to all payment methods used.
The refund amount is deducted from your outstanding balance, and your available credit is increased by the same amount. The refund may appear as a credit on your statement or as a separate transaction. Some issuers may also send you a notification or email when a refund is processed.
Fortunately, certain credit card purchases are likely to be legally protected under Section 75 of The Consumer Credit Act 1974. What does this mean? It means your credit card provider could be jointly responsible with the retailer or supplier if something goes wrong.
TL;DR: The Difference Between Refunds and Chargebacks
A refund is when a merchant chooses to send a shopper their money back. It is initiated by the merchant. A chargeback when a cardholder disputes a transaction with their bank or card issuer, bypassing the merchant. It is initiated by the customer.
Make a credit card payment 15 days before the bill's due date. You might be told to make your minimum payment, or pay down at least half your bill, early. Make another payment three days before the due date. Then, pay the remainder of your bill—or whatever you can afford—before the due date to avoid interest charges.
If you overpaid by a large amount, you might want to get the money back. The process of requesting a refund for overpayment varies by issuer, but you can typically complete it online. When the issuer receives your request, they have seven business days to send you the funds.
If you pay your credit card twice (or more), then it will only affect your credit score positively. It will also help us to: Avoid late fees and penalties.
What happens if I get a refund to a cancelled credit card? If you receive a refund onto a credit card that you've cancelled, the issuer should send you a cheque for the purchase amount.
What happens if my refund is sent to a closed account?
What if my tax refund is sent to a closed bank account? If you realize too late that you have specified a closed bank account on your tax return, the IRS will attempt to process the direct deposit to that account. Your financial institution may reject the direct deposit, sending the funds back to the IRS.
Most of the time, the card-issuing bank will allow the refund to process and accept the funds. If the cardholder has the same card-issuer and bank account, then funds will be successfully credited to that account.
On the other hand, if you paid off your entire credit card balance before you made the return, the statement will appear on your credit card as a negative balance. This means that the credit issuer owes you this amount since you already paid for the balance.
Your balance will be negative. You can either do nothing, and future purchases will bring that back down, or you can ask the issuer to issue a check for the negative balance. If it's an infrequently used card, the issuer will issue a check automatically after a couple of billing cycles.
Interest charges add up: Typically, credit companies will charge you high interest rates on unpaid balances. If you only pay the minimum each month, the interest charges can snowball. The additional interest and any other fees are added on to your balance and can increase a lot over time.
