Full credit card redemption by mistake: can you get a refund?

It’s easy to pay more than you intended on a credit card account.

The online payment screens have a menu of options including “pay statement balance” and “minimum payment”. Push the wrong button and suddenly you’re out of debt and out of money.

“My husband mistakenly paid the full amount on one of our credit cards instead of the minimum payment he intended,” a card user named Melanie wrote in a CreditCards.com issue. “This caused our bank account to go negative and caused a lot of overdraft fees due to the error.”

What are your rights?

What does the law say about overpayments on the card

Card issuers are required by banking law to refund payments in excess of the balance due.

• If you have a credit balance of more than $1it must be returned to you seven days after your written request.
• The credit balance means thatinstead of owing money to the card issuer, they owe you.
• The credit balance may be the result of an erroneous overpaymentor canceling a commission or purchase for which you have already paid.

If you don’t have a credit balance, card issuers are not required to return a mistakenly large payment.

But a random check of several large issuers showed that they are ready to make a refund in this situation.

The key is that they will only refund the payment amount above the minimum payment. This ensures that you meet your minimum commitments within a month.

How to request a card overpayment refund

“Typically, customers who make a payment mistake can call customer service and ask to have their payment reduced to the minimum payment amount,” Bank of America spokesperson Betty Riess said.

Discover will also refund any amount paid in excess of the minimum amount. “Our standard method is verification, however a cardholder can always request an expedited refund,” spokeswoman Britney Mitchell said.

Once the payment is cleared, meaning the funds are transferred to Discover, the company can return the amount back to the customer’s bank within 48 hours via the ACH interbank payment network, she said.

The Pentagon Federal Credit Union, one of the largest US credit unions, said it would work with cardholders who overpay. “In cases of true error, we aim to prioritize the experience of participants and will work within the capabilities of our system to ensure that a participant’s situation has been resolved on an exceptional basis,” Eric Bala, senior director of product and channel development, said in a statement.

Card overpayment refunds may take longer than you think

However, judging by the complaints to the US Consumer Financial Protection Bureau, it is not always possible to quickly return the money.

One California consumer claimed to have overpaid $1,200 on a card issued by Synchrony Bank, which specializes in store cards, after a stop payment request to their bank was not processed in time.

“They said I have to wait 10 days to verify the overpayment and another two weeks to process my refund,” the cardholder wrote in the complaint. “I don’t understand why it takes a financial institution two weeks to process a refund.” The complaint was “closed with an explanation”, meaning that no refund or other form of redress was offered.

Refund of overpayment on the card can go to the wrong address

In another complaint, a Texas card user claimed to have requested a refund of an overpayment by check from a US bank. But instead, the bank sent the refund to the consumer’s bank bill processor. “Now I don’t have $680,” the man said. This complaint was also “closed with explanation”. The US Bank has decided not to publicly respond to the complaint, according to the CFPB.

bottom line

Of course, it’s more profitable for the card issuer to let you keep the balance – and more expensive for you. The bank can refund your overpayment now, but eventually you will have to return this money – with interest. For example, a $500 balance with an average interest rate of $15.5 per annum would take 24 months and over $82 to pay off interest, with minimum payments of $25 per month.

But if paying the full balance results in an overdraft on your bank account and late payments on other accounts, it may be cheaper to refund the amount of the mistaken payment.