How Do Refunds or Reversals Affect Your One Credit Card Bill?

Waiting for a refund on a credit card purchase can be stressful, especially if you are unsure when you will actually get your amount back. Will it be after your credit card bill is generated? Or before? Will it be adjusted to your bill? The answer is that it depends on various other factors such as your purchase date, refund date, and credit card bill generation date.

In this article, we will explain the process of credit card refund adjustment and each scenario that can arise regarding a refund problem.

What is the Process of a Credit Card Refund/Reversal?

The process of receiving a refund may differ from case to case. Here are few common scenarios and how the refund procedure could be like:

Scenario 1

Your transaction date and the date of refund fall within the same billing cycle.

Suppose you made the purchase on your credit card worth ₹2000 on 3rd August, and your due amount became ₹5000. You got a refund of ₹2000 on 5th August. Since you got the refund well before your credit card statement was generated (on 1st September), it will be deducted from your total bill (₹5000-₹2000). So your total bill for the cycle due on 1st September will be ₹3000 (assuming you made no other transactions in between).

Scenario 2

The refund is credited after your credit card bill was generated, however you haven’t paid the bill yet.

Let’s continue the same example where only the refund date is different. You made a transaction worth ₹2000 on 3rd August, and your total due amount became ₹5000. The bill was generated on 1st September, but your refund was credited on 2nd September which was after your credit card cycle. However, you didn’t pay the bill until that time. In this case, the refund amount (₹2000) will still be adjusted against the billed amount (₹5000) of that cycle and your total bill will be ₹3000.

Scenario 3

The refund is credited after your credit card bill was generated, and you have already paid the bill.

If you notice, this is the same scenario as before, with the only difference being—you choose to pay the bill before the refund was credited. You made a transaction worth ₹2000 on 3rd August, and your total due amount became ₹5000. The bill was generated on 1st September and the refund was credited on 2nd September, but you have already paid the bill (₹5000) on 1st September. So in this case, your outstanding balance will become -₹3000 which can be transferred to your bank account by initiating transfer of it from the OneCard app.

In conclusion, these rules are designed to protect consumers and ensure transparency and efficiency in handling credit card refunds and adjustments. The specific details and timelines can vary slightly between different banks and card issuers, but they must comply with the overarching guidelines set by the RBI.