What happens to credit card rewards after you return a purchase?

From shopping splurges to products or services that just didn’t cut it, there are many reasons you may want to return a purchase made with your credit card. If you purchased with cash or a debit card, the returns process is simple enough – you return the product and then your money is refunded immediately.

But what about returns when you use your credit card? Now, you don’t only have to think about the money reimbursed, but also about the rewards you earned on your initial purchase. Unfortunately, if you get a refund for a purchase, you won’t get to keep the rewards you earned.

Here’s what you need to know about what happens to credit card rewards when you make a return.

What to expect with refunds to your credit card

The amount of time it takes to get a refund for purchases made on your credit card depends on the merchant you purchased the item from and your credit card issuer. If you bought an item that is only eligible for store credit upon return – or doesn’t allow returns at all – there isn’t anything your credit card company can do to facilitate that return.

If the company does allow returns, the timeline for a refund typically ranges from a few days to a week or more. Even once a merchant processes a refund, the actual time it takes for the refund to show up in your account is set by your credit card issuer.

When you make a return, the money that is refunded will apply to your outstanding balance, not refunded to you directly. This means that if you return a $150 pair of shoes while having a balance of $500, your new statement will reflect a balance of $350.

However, if you return the same pair of shoes after you have already paid off your balance in full you could end up with a negative balance. While this may sound like a bad thing, it means that the credit card company owes you money to cover the charges you make until the negative balance is back to zero. So if your account balance was $0 at the time of the refund, your balance would become +$150 (essentially a credit), which would decrease as you make purchases.

Can you keep credit card rewards after you return a purchase?

So, you’ve decided you didn’t love the shoes you bought or that the new mattress you purchased is too firm. You can get the money back, but what about the rewards you’ve earned?

Unfortunately, you won’t get to keep them.

As disappointing as this might be – whether it’s cash back, points or miles – credit card issuers across the board will deduct rewards from your account once the refund is processed.

If you have used the rewards you earned before you made the refund, you may end up with a negative rewards balance or negative points. Unlike a negative account balance, where the issuer owes you, a negative rewards or points balance means you owe the issuer rewards. Rewards you earn on ongoing purchases will “pay off” the rewards deficit until you get back to zero.

There’s a loophole to let you keep your rewards

Because of the way that credit card transactions are processed, wherein the merchant is paid by the credit card issuer on your behalf and then the credit card company expects you to pay them back, there is a loophole where you can both return a purchase and also keep your rewards.

If you purchased an item that is available for refund in the form of store credit or postponement in the case of services, you can keep your rewards for that purchase. As far as the credit card company is concerned, it has paid the merchant and you have paid them. Issuers will only deduct your rewards if they have to process an actual refund.

Bottom line

When it comes to making a purchase with a credit card, the transaction time takes less than a second to process. When it comes to returns, however, the process can be a little more lengthy. If you are planning to make a return, you likely won’t be able to keep the rewards on your purchase unless you consider options like store credit.

Source: creditcards.com

7 Unexpected Benefits of a Good Credit Score

Do people understand the benefits of a good credit score? Everyone knows your credit score is important, but what exactly are the benefits?

In the United States, 28% of its citizens rely on credit when running out of money. While it’s good to use your credit, it’s not always wise to carry over a balance from month to month. If you can’t pay it back, your credit score will take a hit.

Most Americans know that your credit score is a golden ticket to a more manageable financial life. Whether you’re looking to maintain your credit score or increase it, the right motivation is essential.

That’s why we’re going to talk about the benefits of a good credit score. To keep you motivated to strive for more and let you know what’s waiting on the other side.

7 Unexpected Benefits of a Good Credit Score

We all know that having a good credit score is something everyone should want. If you need some extra motivation to increase your credit score or are curious what a high credit score will mean for you, here are the unexpected benefits of a good credit score.

1. Starting and Owning a Business

According to Forbes, consumers owed $323 billion on personal loans in 2020. The banks limited loan opportunities because of the increasing risk of default.

On a different note, loan applicants with good credit scores will have a much better chance of receiving an approval for the funds needed to set up a business or start a side hustle. Though some lenders may consider people with lower credit ratings, lenders have a habit of charging them with a higher APR (Annual Percentage Rate).

2. Less Hassle Getting Approvals

Imagine being denied something as common as a network provider subscription. Applications for basic household utilities and other post-paid subscriptions usually require credit reports. It also applies when you’re going to rent a space and need to pass a rental credit check, where the approval will depend on your ability to meet monthly payments on time.

While having a good credit score doesn’t mean you’ll get approved for every loan, it can increase the chances of approval. You can ask for new credit or new loans, and they will be quicker to grant it to you when you have a good credit score.

3. Better Risk Means Lower Interest Rates

Aside from having a better shot when applying for loans, you won’t have to worry about being charged exuberant amounts of interest with a good credit score.

Poor credit scores can lead to having the loan denied or charged at a much higher rate. Lenders assume a low credit score means it’s probably harder to settle the credit on time. It brings a higher risk that they need to offset with higher charges.

High credit scores imply that you have settled outstanding credit on time in the past. That’s why you’re charged lower interest rates on credit card balances you carry or loans you have.

It doesn’t matter if you’re looking for a personal loan, mortgage, student loan, or are carrying a balance on your credit card. Your credit score influences the interest rates at most places.

When you’re charged with a lower interest rate, you could pay off your debt faster and use the money toward other things.

4. Lower Insurance Rates

When you’re getting your mortgage or your car loan for a lower interest rate, you can also save on the insurance when you have a high credit score.

Insurance companies have their way of calculating the probability that you will make a claim, their so-called “insurance score.” The input comes from your credit report, and the variations between the two are minimal.

Insurance companies believe that when you have a lower credit score, you will file more claims. Whether that’s true or not, they base their decisions on it.

If you have a good credit score, be sure to compare insurance companies before you settle for one.

5. Great Credit Card Deals

If you have a good credit history and want to continue increasing it, know that you can get excellent credit card deals when you have a strong credit score.

These credit cards can have lower interest, offer credit card rewards, airline miles, or cash back on your purchases. It will make sure that you keep using your credit card, which will help you keep your credit score up. Plus, it will help you save money with cash back rewards.

The important thing here is that you make payments when they’re due and try to close as much balance as you can at the end of the month.

6. Room To Negotiate

It’s always better to negotiate. That’s also the case with your credit score.

When you’re looking for something specific, be sure to ask around and see if anyone can offer you a competitive rate. If you have a high credit score, you can ask companies for a price decrease or an interest rate decrease because you always pay on time and have a good credit history.

Companies have less room for negotiation when you have a lower credit score because specific standards and procedures need to follow.

7. That Special Requirement When Landing A Job

According to CNBC, 72% of employers still do background checks, and 29% of those employers check credit reports. If a poor credit report reveals bad financial habits, it may influence the decision to hire someone.

Of course, this depends entirely on the position. When you’re handling other people’s money or holding a public function, it’s more relevant than when you’re behind a computer doing web development.

Some Consumer Facts:

  • Around 21% of the American population has a good FICO® credit score.
  • In 2020, the average credit score in the US was 710. This is a record high, despite the pandemic.
  • Between 2019 and 2020, the average credit card debt decreased by 14%, from $6,194 to $5,315.
  • 35% of your credit score is based on Payment History. This may include payment information on credit cards, mortgages, installment loans (auto loans or student loans), retail accounts, and consumer finance company accounts.

Conclusion

There are a lot of ways to keep ourselves within the boundaries of our spending capabilities. Set a goal, spend less than you earn by creating a budget, and maintain a good credit score.

A good credit score can mean unexpected benefits like quicker approvals for credit or loans, utilities, phone plans, and even renting a place. You will get better credit card deals, pay lower interest, get lower insurance rates, and can get a loan quicker to start your own business. When you have a high credit score, make sure you negotiate your rates down, as that can save you even more. Employers will also value a good credit report, which may get you the job quicker.

If you want all of these benefits and aren’t sure how to get there, here’s tips on how to improve your credit score.

Source: credit.com

Chase Offers program guide

If you’re tired of clipping coupons and searching for promo codes but still want to save money, Chase Offers can help you earn cash back at the places you already shop. By taking a few minutes to browse deals and link them to a card, eligible Chase credit and debit cardholders can quickly start racking up statement credits.

What is Chase Offers?

Similar to other card-linked offer programs, Chase Offers gives cardholders deals from popular brands designed to help them save money on purchases such as dining, clothing and travel. There are plenty of deals to choose from and there’s something for every kind of spender.

“We also are featuring offers from partners that are exclusive to Chase customers,” says Maribel Ferrer, communications director of payments at Chase Offers. This makes it easy for users to know that they are getting great value and savings they couldn’t find hunting for a traditional coupon or promo code.

How does Chase Offers work?

Chase Offers is a pretty straightforward program and easily accessible for eligible members.

Ferrer says that Chase Offers doesn’t require customers to sign up and that customers who use the Chase Mobile App will automatically see their offers at the bottom of their home screens.

“All they have to do is simply add offers to their card with a single tap and then shop at the merchant to earn an automatic statement credit,” says Ferrer. There’s also no limit to the amount of deals you can choose and no penalty for not using an offer.

Once you make a qualifying purchase, you’ll receive the offered statement credit in the next seven to 14 business days.

Outside the Chase app offers, these deals are also available on the Chase website, in addition to on the mobile app. You can receive updated Chase Offers online via email, too. These options make it even easier for cardholders to find offers that work for them no matter where they prefer to browse.

Restrictions and drawbacks with Chase Offers

While Chase Offers has some unique features that add value for users, there are also some drawbacks to the program:

Chase Offers vary by eligible card

These exclusive Chase credit card offers are specific to each of your eligible cards, so you can’t use multiple cards to take advantage of the same deal more than once (unless it happens to be offered for both). If you spend differently on different cards, it’s  is likely your available deals will vary.

Keep close watch on the terms and conditions

Each merchant offer also has its own set of terms and conditions that you’ll want to read carefully. Offers might require certain purchase amounts or be limited to one use per card. To make sure you actually earn the statement credit, be careful with how you spend.

Chase Offers is only available in the U.S.

While many similar programs include offers outside of the U.S. – even if your purchase is made in a foreign currency – Chase Offers is only available stateside for now. You won’t be able to rack up extra cash back while you travel.

Types of deals you can find

“Deals vary and there is something for everyone,” says Ferrer, citing examples like pet shops and hardware stores as unique deals on Chase Offers. In addition to travel, dining and retail promotions, Chase Offers users can find exclusive cash back from a wide variety of brands.

To make the experience even more unusual, Chase Offers are tailored to the specific user. When you log into your Chase mobile app, you’ll see recommended deals inspired by your location and spending patterns.

Earn more with Chase rewards cards

Making a purchase to redeem a Chase Offer doesn’t affect your normal credit card rewards earning, so you can use deals to boost your overall rewards rate. If you stack Chase Offers on rewards earned on cards like the Chase Sapphire Preferred Card or Chase Sapphire Reserve card – two of our most popular travel cards – you can earn enough for your next trip in no time.

Here’s a quick look at a few of Chase’s rewards cards to give you an idea of what you can earn.

Intro bonus Rewards rate Annual fee
Chase Sapphire Preferred

Chase Sapphire Preferred® Card

60,000 points if you spend $4,000 in first 3 months
  • 5X points on travel purchased through Chase Ultimate Rewards
  • 3X points on dining, select streaming services and online grocery purchases (excluding Target, Walmart and wholesale clubs)
  • 2X points on other travel
  • 1 point per dollar on general purchases
$95
Chase Sapphire Reserve

Chase Sapphire Reserve®

50,000 points if you spend $4,000 in first 3 months
  • 10X points on hotels and car rentals purchased through Chase Ultimate Rewards
  • 5X points on air travel purchased through Chase Ultimate Rewards
  • 3X points on other travel and restaurant purchases
  • Earn elevated rewards on all travel purchases immediately after spending the $300 annual travel credit
  • 1X point on general purchases
$550
Chase Freedom Unlimited

Chase Freedom Unlimited®

  • Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year)
  • 5% cash back on Lyft purchases (through March 2022)
  • 5% cash back on travel purchased through Chase Ultimate Rewards
  • 3% cash back on restaurant and drugstore purchases
  • 1.5% cash back on all purchases
$0
Chase Freedom Flex℠ review

Chase Freedom Flex℠

  • $200 if you spend $500 in first 3 months
  • 5% cash back on rotating bonus categories that you must activate each quarter (on up to $1,500 per quarter)
  • 5% cash back on Lyft purchases (through March 2022)
  • 5% cash back on travel purchased through Chase Ultimate Rewards
  • 3% cash back on restaurant and drugstore purchases
  • 1% cash back on general purchases
$0
Ink Business Unlimited

Ink Business Unlimited® Credit Card

$750 if you spend $7,500 in first 3 months
1.5% cash back on all purchases
$0
Ink Business Cash

Ink Business Cash® Credit Card

$750 if you spend $7,500 in first 3 months
  • 5% cash back on internet, cable and phone services and at office supply stores ($25,000 in purchases per year)
  • 2% cash back on gas and dining ($25,000 in purchases per year)
  • 1% cash back on other purchases
$0

How to maximize rewards with Chase Offers

To ensure you are getting the most cash back from your Chase Offers, follow a few simple tips:

Combine Chase Offers with paper coupons, promo codes and other deals

Since statement credits for Chase Offers are awarded simply for using an eligible Chase credit card, you can usually still utilize paper coupons or promo codes when you make your purchase. If you take a little extra time to hunt for merchant promotions, you can boost your savings.

And if you have more than one credit card, you can take advantage of multiple card-linked offer programs. For example, if you have another Chase Visa card, you can link it to Uber’s Visa Local Offers program for extra Uber Cash. That’s an especially effective combo with a card that earns rewards on Uber, like the Chase Sapphire Reserve and its 3X points on dining and other travel not purchased through the Chase portal (after the annual $300 travel credit – which can also be used on Uber).

Shop using cash back portals to stack offers

Similar to using a promo code, you can shop online using cash back portals to stack promotions. Shop Through Chase is an excellent place to start collecting a few extra Ultimate Rewards points. Other websites like Cashback Monitor clearly show where you can earn rewards from particular merchants. If your Chase Offer applies to online purchases, shop through the cash back portal and use your linked Chase card to pay to earn even more.

Check for a Chase Offer every time you dine out

While Chase Offers range from retail promotions to travel offers, most deals seem to be dining-related. Before you eat out, check your Chase mobile app for an offer at your favorite restaurant to ensure you aren’t missing out on savings.

Amex Offers and BankAmeriDeals.

Bottom line

If you are a Chase customer, it’s no question that you can get great value by taking advantage of Chase Offers. You’ll find exclusive deals without the hassle of hunting down a coupon and automatically receive statement credits quickly.

Source: creditcards.com