If you have a credit card, you may at some point see a statement credit on your account statement. Alternatively, you may have seen it mentioned as a card benefit in certain situations. But what is a statement credit and how can you use it?
Statement credit meaning
A statement credit is money that is credited to your account. You'll likely see any statement credits you receive appear in your transactions and as a category of account activity.
Statement credits may come from the issuer of your credit card or a merchant, and you may see them in a different color than payments on your transactions list, or it may have a plus sign in front of it, indicating the amount has been added to your account.
A statement credit does deduct from your card's overall balance, but it does not count as a credit card payment; you would still be responsible for making your minimum monthly payment.
When is a statement credit issued?
There are a few different scenarios in which a statement credit may be issued.
- Returns: If you use your credit card to purchase something you then end up returning, a statement credit could be then applied to your account.
- Rewards or points: If you have a credit card with cash back rewards and decided to put those points toward paying off your balance, you may see that payment applied as a statement credit. Additionally, you may be able to redeem other rewards or points as statement credits, depending on your credit card and issuer.
- Qualifying purchases: Some credit cards offer reimbursements in the form of statement credits for specific purchases. For instance, Chase Sapphire Reserve offers reimbursement for programs like TSA PreCheck, Global Entry and NEXUS. This means if you use your Sapphire Reserve card to pay for one of those programs, a statement credit would be applied to your account as reimbursement of the application fee.
- Welcome bonus: If you're new to a specific credit card, you may be eligible for a welcome bonus after spending a certain amount within the first few months. Depending on the card, this bonus may be in the form of points, miles or cash back. If it's cash back, you'll generally see that bonus come through as a statement credit.
- Disputed charge: There are numerous reasons why you might dispute a charge on your credit card statement. If you're in a situation where this is necessary and your card issuer agrees to credit your account, this is often provided as a statement credit.
How to redeem statement credits
When it comes to scenarios like returns, qualifying purchases and welcome bonuses, you generally won't have to do anything to receive your statement credit — your issuer should do it automatically. However, if you wish to redeem your rewards as a statement credit, you may need to access your account online to decide how to use them.
A statement credit can appear on your credit card account for numerous reasons — from return refunds to cash back rewards. If you see a statement credit and you aren't sure what it's for, you can always contact your issuer for clarification.