Credit cards can be a convenient way to make purchases, but sometimes you need to return an item for one reason or another. Using a credit card means you don’t receive money in your bank account. Instead, there are a couple of steps needed to get it done.
Let's look at how credit card refunds work.
How does a refund on a credit card work?
If you’re refunded for a purchase made with your credit card, the merchant typically credits the applicable purchase amount back to your credit card issuer. Then, the issuer credits your account for the refund amount, and that appears as a credit on your credit card statement.
How long does a credit card refund take?
In general, it may take anywhere from a few days up to several weeks to receive a credit card refund. However, the timeline depends on the merchant’s refund policy, which can vary by merchant. They should disclose their processing timeline for a qualifying refund.
It's typically best to review and understand a merchant’s return policy before making a purchase with your credit card, particularly if you’re making a larger purchase.
Credit card vs. debit card refunds
The main difference between credit card and debit card refunds is where the refund goes. With a credit card, that transaction is credited to your account balance, lowering your credit utilization. With a debit card, on the other hand, refunds go directly back into your linked bank account.
However, keep in mind that credit card purchases come with more robust protections than debit card purchases. For example, if there’s an unauthorized transaction on your credit card, you may only be liable for up to $50, whereas you may be liable for the entire transaction if it’s made with your debit card.
