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if you make a $100 purchase on credit card, and later get a $100 refund, do you still need to pay the credit card bill?

4,275 602 March 25, 2020 at 12:00 AM
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Bank of America's retarded system seems to think so.

In February I made a $50 purchase from walmart, right before the end of the statement period.
$50 was the only charge for this statement period.

In the beginning of the next statement period, I returned the item and got a $50 refund from walmart.

That refund should have wiped out the statement balance from a few days prior.

At the bill due date a few days ago, bofa charged me a late fee because I didn't pay the $50, for which I already got a refund credit.

If I had paid $50, my account would have been overpaid.


I called bofa, and the sneaky rep said he couldn't remove the late fee, saying it was a legit fee.
I told him to use some common sense logic. The refund I got from the merchant is equivalent to a bill payment, and I didn't need to pay more.

He finally let up and reversed the late fee.


Is this how credit cards usually work? Even if you get refund credits that more than cover the bill due, you still have to pay the bill?

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#2
Yes, credit cards usually give you a hassle if you don't give them the money they want.

What they expected you to do was pay the bill. Then, you'd have a $50 credit on your next statement after the return. They expect you to treat that like free money and to go spend it. If you don't spend it for a couple of months, they cut you a refund check.
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#3
Quote from bonkman
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Yes, credit cards usually give you a hassle if you don't give them the money they want.

What they expected you to do was pay the bill. Then, you'd have a $50 credit on your next statement after the return. They expect you to treat that like free money and to go spend it. If you don't spend it for a couple of months, they cut you a refund check.
Curious, I bought an item from Costco dot com, didn't like it and then submit a return online. Later I was like "I'm better off returning it at the store and get it over with and don't have it to get it shipped back." So I went to return it to the store and got refunded.

Later, I checked my balance statement and it shows refund from Costco dot com for the same exact balance. I was like "weird...but left it alone because I assumed Costco dot com will need to communicate with the bank to appropriately adjust the charge ie void the refund."

Nearly one month later as of today, my account still show refundable credit. Like charge wasn't even cancelled back to Costco dot com.

Not sure what to do as I don't want to make a costly mistake. Any suggestion ?
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Last edited by SpaceMan6969 March 25, 2020 at 07:34 PM.
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Quote from SpaceMan6969
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Curious, I bought an item from Costco dot com, didn't like it and then submit a return online. Later I was like "I'm better off returning it at the store and get it over with and don't have it to get it shipped back." So I went to return it to the store and got refunded.

Later, I checked my balance statement and it shows refund from Costco dot com for the same exact balance. I was like "weird...but left it alone because I assumed Costco dot com will need to communicate with the bank to appropriately adjust the charge ie void the refund."

Nearly one month later as of today, my account still show refundable credit. Like charge wasn't even cancelled back to Costco dot com.

Not sure what to do as I don't want to make a costly mistake. Any suggestion ?
Not entirely sure what you mean. You got credited for the return twice, so now you have a credit? If that's the case, they'll probably figure it out eventually but it may take a few months. Or maybe it'll be an error in your favor.
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#5
Quote from bonkman
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Not entirely sure what you mean. You got credited for the return twice, so now you have a credit? If that's the case, they'll probably figure it out eventually but it may take a few months. Or maybe it'll be an error in your favor.
Yes, returned credit twice. Sorry for my so-so English grammar.

How long shall I left it alone? I thought I should do something about it, no?
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Quote from SpaceMan6969
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Yes, returned credit twice. Sorry for my so-so English grammar.

How long shall I left it alone? I thought I should do something about it, no?
If you want to be nice, you can contact your credit card company and they should be able to clear up the mistake. I've heard of this happening before and it can take up to three months for them to figure it out on their own.
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#7
Typically no.

Credits are posted as immediate payments on the open statement. so let's say you have an open statement with $2000 bill. You then, in the current statement period, go buy a TV for $1000 and return it. Those charges do not offset, instead you'll get $1000 purchase and $1000 refund. The refund acts as a payment which will go against your $2000 open statement, thus you'd only owe $1000 OOP. Of course next statement you'll owe the $1000, so it only delays things.

Different CC's might do things differently, the above is only my experience (mostly Discover card). Note that some people actually use this to defer costs over time. Theoretically you could keep rolling (buy/return) purchases and defer an owed amount indefinitely. [I actually had a coworker that liked to do this]
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It's not clear from your post but was your balance $0 going in to the month? If you carried any balance over then you still would have been expected to make a payment in that amount.
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#9
Quote from Dr. J
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Typically no.

Credits are posted as immediate payments on the open statement. so let's say you have an open statement with $2000 bill. You then, in the current statement period, go buy a TV for $1000 and return it. Those charges do not offset, instead you'll get $1000 purchase and $1000 refund. The refund acts as a payment which will go against your $2000 open statement, thus you'd only owe $1000 OOP. Of course next statement you'll owe the $1000, so it only delays things.

Different CC's might do things differently, the above is only my experience (mostly Discover card). Note that some people actually use this to defer costs over time. Theoretically you could keep rolling (buy/return) purchases and defer an owed amount indefinitely. [I actually had a coworker that liked to do this]
But I have -$330 on my credit card balance and the return was made last month which should bring the balance to from +330 to 0; not -330 as if the bank owes me. I still owe the bank nothing. I'm gonna give them 2 more months for them to clean it up . It their job to do so.
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#10
Whatever the question is, here is the secret code:

If it benefits the bank, they WILL DO IT.

For example:

Let say you run a TIGHT checking account, keeping only the money you are going to use. I have known of banks processing withdrawals before deposits, even if YOU made the deposit before the withdrawal. What that does is trigger an overdraft and potentially a fee on an already overdrawn account.

If you wan to play the game you have to know and follow the rules. Use your cards, get points, but don't pay interest. The banks have more ways to screw you than you have ways to screw the bank.
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Quote from NYExcuse
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It's not clear from your post but was your balance $0 going in to the month? If you carried any balance over then you still would have been expected to make a payment in that amount.
to make it simple
statement balance was $50. I only bought one thing that month.
a few days after the statement came out, (beginning of the new statement cycle) i got a refund, and credit for $50.

Had I paid off the $50 balance, my account would have seen a $50 credit as well.
That's why I assumed the $50 walmart refund was equivalent to me paying off the $50 balance, since both result in an account credit.


On other credit cards in the past, I have deducted refunds from the balance due, and never had any issues or late fees.

e.g. $100 statement balance due, I get refund for $25 during the new billing cycle, I pay $75 to pay off the statement, instead of $100.
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Quote from link626
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to make it simple
statement balance was $50. I only bought one thing that month.
a few days after the statement came out, (beginning of the new statement cycle) i got a refund, and credit for $50.

Had I paid off the $50 balance, my account would have seen a $50 credit as well.
That's why I assumed the $50 walmart refund was equivalent to me paying off the $50 balance, since both result in an account credit.


On other credit cards in the past, I have deducted refunds from the balance due, and never had any issues or late fees.

e.g. $100 statement balance due, I get refund for $25 during the new billing cycle, I pay $75 to pay off the statement, instead of $100.
I'm not asking you to make it simple. If you had carried any balance through the month then you would have still owed a payment for the interest accrued.

Look at it like this. I have $500 on a credit card with 10% month interest and carry the balance. This month I spend $50 on something. I'll get a statement next month with a minimum payment of $50 (.10*500). Now I return the item I purchased last month and the $50 comes off my balance. I still owe the $50 in interest this month.
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Quote from NYExcuse
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I have $500 on a credit card with 10% month interest and carry the balance. This month I spend $50 on something. I'll get a statement next month with a minimum payment of $50 (.10*500). Now I return the item I purchased last month and the $50 comes off my balance. I still owe the $50 in interest this month.


Then no, my situation is different from your example. You started with $500.

I started with zero balance. Then I bought an item for $50, and returned it a few days later.

I always pay off my monthly balances in full. I never pay interest.
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Quote from link626
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Then no, my situation is different from your example. You started with $500.

I started with zero balance. Then I bought an item for $50, and returned it a few days later.

I always pay off my monthly balances in full. I never pay interest.
Feb 25th you purchase item
Feb 26th your statement closes with $50 pay in full balance
Feb 28th you return item

March 1st your refund posts and -$50 posts zeroing out your balance (assuming no new charges)

March 7th is your payment due date...as far as the bank is concerned you still have an outstanding balance for the Feb 26th statement and a -$50 credit for the March 26th statement.

If you do not pay the $50, there will be interest charged and the interest will more than likely be deducted from the -$50 credit on the following statement.

If you sparsely use the card, you can either leave it dormant for a few statement periods like the poster above said and have them cash you out or call the bank up and have them cut you a check (usually can take 7-10 business days to get though).
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Quote from link626
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to make it simple
statement balance was $50. I only bought one thing that month.
a few days after the statement came out, (beginning of the new statement cycle) i got a refund, and credit for $50.

Had I paid off the $50 balance, my account would have seen a $50 credit as well.
That's why I assumed the $50 walmart refund was equivalent to me paying off the $50 balance, since both result in an account credit.


On other credit cards in the past, I have deducted refunds from the balance due, and never had any issues or late fees.

e.g. $100 statement balance due, I get refund for $25 during the new billing cycle, I pay $75 to pay off the statement, instead of $100.
And this is exactly how it would work the following month, lets say you bought a $75 gift card to Amazon, your -$50 would show as a negative number and would be subtracted from the $75 charge leaving you with a $25 bill when the statement closes.
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