What is a statement credit?
A statement credit is money that’s credited back to your credit card account, lowering your account balance. 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.
If you’ve ever returned a purchase you made with your credit card, you’ve probably earned a statement credit.
What you’ll learn:
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When you receive a statement credit, it means you’re getting money credited back to your account. This can reduce the amount you owe your credit card issuer.
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You can earn a statement credit by getting a refund for a returned purchase.
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You could also earn statement credits through things like price adjustments, reward redemptions, qualifying purchases and sign-up bonuses.
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Statement credits can reduce your credit card balance, but they generally don’t count as a credit card payment.
How do statement credits work?
The way statement credits work depends on your credit card balance at the time:
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When the balance is higher than the statement credit: Typically, statement credits are automatically applied to your credit card bill and reduce the amount that you owe your credit card issuer. But they generally don’t count as a payment toward your bill. In most cases, you still have to make your minimum credit card payment to avoid penalties and keep your account in good standing.
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When the balance is lower than the statement credit: Statement credits could result in a negative balance if the amount is more than your outstanding balance. In this case, the credit could remain on your account and be applied the next time you use your card. Or you may be able to request the credit as an electronic funds transfer or a check, depending on your issuer’s policies.
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When the balance equals the statement credit: If the statement credit equals your outstanding credit card balance, the account balance would be $0 once the credit is applied.
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 generally refunds the original form of payment. So if you used your credit card to make the original purchase, you may 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 $120 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 new cardholders who make $500 in purchases within three months of the account being opened.
Through a disputed charge
You may choose to dispute a charge if 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. While the dispute is investigated, you may receive a temporary statement credit. If the dispute is resolved in your favor, the statement credit will be applied permanently, and you won’t be responsible for the charge.
Key takeaways: Statement credits
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 by returning a purchase, through a price adjustment or dispute, by redeeming rewards, or through a sign-up bonus or qualifying purchase.
Statement credits typically don’t count as a payment toward your credit card bill. If you carry a balance after the statement credit has been applied, you’ll still need to make your minimum credit card payment to avoid penalties and keep your account in good standing.
