What is a credit statement?

Have you ever wondered what those green negative numbers mean on a credit card statement? If you’re a credit card holder, chances are you’ve come across them more than once. These are statement loans and they can appear for a number of reasons.

If you find statement loans confusing, you are not alone. Many credit card holders have questions about them. Here’s what you need to know about what statement credits are, how to get them, and how to use them.

What is a credit statement?

A credit statement is like a refund you get from a credit card company or merchant. This is money credited to your account that is deducted from your balance and therefore appears as a negative number on your statement. This significantly reduces the amount of money you owe.

In some ways, a credit statement is like paying a portion of your credit card balance. The difference is that instead of you depositing your money, the credit card issuer or bank reduces your debt.

It is important to note that even though statement credits decrease your balance because you are not depositing money into your account, they do not count towards your minimum payment calculation. This means that even if you “pay off” most of your balance with a credit statement, you still have to make at least the minimum monthly payment on your outstanding balance.

How to earn statement credits

There are several ways to get a loan statement:

Returned goods

Typical statement credits come from refunds for returned purchases. If you bought something with a credit card and then returned it, the seller issues a refund in the form of a credit statement, which should appear on your statement within a few days of returning the item.

Bonuses for registering a credit card

Many credit card issuers offer credit statements as an incentive for signing up for a new credit card. In some cases, these statement credits can only be used to pay for certain categories of purchases, such as travel or meals, while others can be used to cover any purchase.

One example is the Blue Cash Preferred® Card from American Express, which gives you $300 credit if you charge $3,000 or more in the first six months. This statement credit is then applied to the next $300 purchases that you charge your card after receiving the bonus.

credit card rewards

Many rewards credit cards allow you to use points, miles or cash back as a statement to pay for various purchases. Different rewards programs handle these redemptions differently. Here’s how some of the major incentive programs relate to making loans:

bonus program	Can you redeem rewards as a loan statement?	Minimum ransom	Interest rate when repaid in the form of a loan
Discover Cashback Bonus Cards	Yes	None	1:1
Bank of America cash awards	Yes	No ($25 for automatic redemption)	1:1
American Express Membership Rewards	Yes	$25	1:0.6
Chasing the top honors	Yes	20 dollars	1:1

Special credit card privileges

In addition to shopping rewards, some high-end credit cards also offer valuable perks, including special recurring statement credits. For example, the United Explorer Card and Chase Sapphire Reserve offer a credit statement of up to $100 to cover the cost of a Global Entry or TSA PreCheck application.

Chargebacks

Chargebacks are disputes you can file when the seller refuses to refund your money even if the product or service doesn’t meet your expectations or you never received the product. People also file chargebacks when they notice a purchase they don’t recognize on their application. If you are successful in obtaining approval for the chargeback, your credit card issuer will provide you with a credit statement for the amount of the disputed purchase.

How to use a credit statement

The use of statement credits depends on how you earn them. In most cases, you don’t have to do anything – they’ll just show up on your credit card statement every month. For example, this is the case when you return an item or make a qualifying purchase with a credit card that offers a cash reward in the form of a statement. This also applies to most signup bonuses, especially those that apply to all purchases.

On the other hand, special cashback programs that partner with certain brands, such as Uber, sometimes require you to sign up for a particular offer, but once you do, the credits will usually show up automatically on your statement.

Using bonus points for issuing loans

The main case when you need to take action to get a loan statement is when you exchange rewards for points, miles or cashback. This is because if your rewards card offers them, you need to select this option. To redeem your rewards for a credit statement, you usually need to log in to your online credit card account, select the appropriate purchase, and then decide to apply your rewards as a credit statement.

bottom line

A credit statement is a great way to get money back from your credit card company for various purchases, fees, and even disputes. You can expect them to show up on your statement, but there are a few instances where you may need to take some extra steps, such as redeeming Reward Points for statement credits.

However, discharge credits offer convenience in exchange for lower cost per point or mile, making them a poor choice if you want to maximize the value of your points. However, in the case of special credit card privileges and signup bonuses, a credit statement is just as valuable as having cash in your account. All in all, a credit statement is a great way to get extra value from your credit card.