If you don’t have a credit card, you may not be aware that you can get a refund on a credit card purchase if you are not happy with it. But how does a refund on a credit card work? Read on to find out.
How does this type of transaction work?
Once you request a refund, the retailer doesn’t pay you directly. Instead, they pay your credit card provider, who then credits your account with the amount received from the retailer.
How long does it take for a refund to go back on your credit card?
The time taken for the refund depends on the following:
- The retailer’s return policy
- Whether the purchase was online or via a retail store
- How quickly the goods are returned to the retailer
- Your credit card’s billing cycle
Generally, you should expect to wait around five to 10 days for the refund to appear on your credit card.
What does a refund look like on a credit card statement?
This can vary depending on the credit card provider. Many credit card companies show a refund like any other credit to your account.
It will be treated in the same way as a transaction that takes place when you pay your monthly credit card bill. The main difference is that the refund will come from a retailer.
If you have an outstanding balance, your card provider will minus the refund from the outstanding balance.
What happens if a refund goes to a credit card with no balance?
So, how does a refund on a credit card work when there is no outstanding balance?
Once the refund is complete, it will appear as a credit on your account. This is often called a negative balance, meaning that your card provider owes you money.
There are two different ways you can deal with a negative balance:
- Leave the balance on your card and use it to make future purchases until the balance is reduced.
- Ask the credit card company to transfer the balance to your bank account.
Could you be rewarded for your everyday spending?
Rewards credit cards include schemes that reward you simply for using your credit card. When you spend money on a rewards card you could earn loyalty points, in-store vouchers airmiles, and more. MyWalletHero makes it easy for you to find a card that matches your spending habits so you can get the most value from your rewards.
What happens when a balance is transferred to a bank account?
This varies depending on the credit card provider. There are some general rules that may be applied:
- Your card provider will not allow you to transfer the refund amount if your account is not in credit.
- The balance must be transferred to a UK bank account.
- The UK bank account often needs to be one that you nominated when you set up your credit card account.
- It can take around five to 10 working days to process the request.
If you require a refund on your credit card, it’s best to deal with it sooner rather than later.
When dealing with a refund for a large amount, contact your credit card provider and arrange a transfer. It’s better that your card provider is not holding your money, since it could be put to good use.
Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.