Statement credit: What it is & how it can be used

If you’ve ever returned a purchase you made with your credit card, you’ve probably earned a statement credit. But what exactly is a statement credit? How does it work? And how else can you earn one?

Read on to learn the answers to these questions and more.

Key takeaways

  • A statement credit is money that’s credited back to your credit card account, reducing the amount you owe your credit card issuer.

  • Getting a refund for a returned purchase is just one way a statement credit can be earned. You could also earn statement credits through things like price adjustments, reward redemptions, qualifying purchases and sign-up bonuses.

  • Even though statement credits reduce your credit card balance, they generally don’t count as a credit card payment.

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What is a statement credit?

A statement credit is money that’s credited back to your credit card account.

How does a statement credit work?

Statement credits are generally shown under the account summary on your credit card statement, and each credit gets its own line item in your list of transactions for the billing period.

Typically, statement credits are automatically applied to your credit card bill and reduce the amount that you owe your credit card issuer. But they typically don’t count as a payment toward your bill—you’ll still have to make your minimum credit card payment in order to avoid penalties and keep your account in good standing.

However, keep in mind that it’s possible for a statement credit to result in a negative balance if the credit is more than the amount you owe. And if that happens, don’t worry. It just means that your credit card issuer owes you money—instead of you owing your issuer.

How statement credits are earned

Statement credits can be earned in a variety of ways. For example, you may get a statement credit:

By making a return

When you return an item you purchased, the merchant will generally refund the original form of payment. So if you used your credit card to make the original purchase, you’ll get your refund in the form of a statement credit to your credit card account.

Due to a price adjustment

If you recently used your credit card to purchase something that’s now on sale, some merchants will honor the sale price at your request. That means you could receive a statement credit for the difference between the price you originally paid and the sale price.

From redeeming rewards

Many credit cards offer rewards like cash back or points. And those rewards can often be redeemed in the form of statement credits.

With a qualifying purchase

Credit card issuers often offer statement credits that come with certain qualifying purchases. For instance, eligible Capital One cardholders can receive up to a $100 statement credit on the application fee for TSA PreCheck® or Global Entry.*

As a sign-up bonus

New cardholders can sometimes earn a credit card sign-up bonus if they meet certain requirements after opening the account. And cash back bonuses are typically rewarded as statement credits. For example, Quicksilver from Capital One offers a one-time $200 cash bonus to a new cardholder who makes $500 in purchases within three months of the account being opened.

Through a disputed charge

If you’ve ever had to dispute a charge—either because the transaction was for the wrong amount, you didn’t receive or accept the item, or you returned the item and didn’t get a refund—you’ll receive a temporary statement credit while the dispute is investigated. If the dispute is resolved in your favor, the statement credit will apply permanently and you won’t be responsible for the charge.

Statement credits in a nutshell

A statement credit is money that’s credited back to your credit card account, reducing the amount you owe your issuer.

You can earn a statement credit in a variety of ways. You may get one for:

  • Making a return

  • A price adjustment

  • Redeeming rewards

  • A qualifying purchase

  • A sign-up bonus

  • A disputed charge

But remember that statement credits typically don’t count as a payment toward your credit card bill—in order to avoid penalties and keep your account in good standing, you’ll still need to make your minimum credit card payment.

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