What is a Statement Credit?

Photo to accompany story about statement credits. Getty Images
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If you see a number with a minus sign in front of it on your credit card bill, you’re likely looking at a statement credit. 

It may feel a little bit like getting a gift from your credit card issuer, but it’s actually money you are entitled to, and it may be credited back to you for a variety of reasons.

That includes returns, credits and even the reimbursement of application fees for travel programs such as TSA PreCheck, which some credit cards provide. All those statement credits will look like a transaction for a negative amount, thus lowering the amount you owe on your bill.

Let’s take a closer look at what a statement credit is, and how to get one.

Returning Items You Do Not Want

If you used a credit card to purchase goods you later returned, you’ll receive a statement credit. You can generally expect the statement credit to be the same amount of money as the item or items you originally purchased, but this can vary based on the merchant’s return policy, for example depending on whether it charges for shipping on returns.

I recently purchased some bathing suits from Andie, and ended up wanting to return one of them. I received a statement credit for the price of the bathing suit I returned.

Disputing a Credit Card Transaction

If you’ve filed a credit card dispute and successfully obtained a chargeback, you’ll also receive a statement credit on your bill.

This includes fraudulent, erroneous or double charges on your bill, which you will not be liable for.

Pro Tip

If you have a travel rewards card, check your credit card offers to see if you’re eligible to receive a statement credit (and thus, discounts or bonus points) from some of your favorite retailers.

Once you file a credit card dispute over goods or services you purchased with your credit card issuer, the issuer will issue you a temporary credit while investigating the issue with the merchant. If the investigation confirms the charge was made in error or fraudulent, the statement credit will then be made permanent and you will not have to pay for those goods and services. Typically, interest is not charged on the purchase in these situations.

You can file a credit card dispute with your issuer either over the phone or by logging into your account online.

Taking Advantage of Targeted Credit Card Offers

If you have a travel rewards credit card, you can receive statement credits on your purchases directly, without redeeming points or miles. For example, many credit card issuers partner with retailers, and entice potential and current cardholders with perks from those stores.

This typically comes in the form of targeted credit card offers based on your spending habits, which mean you can save money (or earn points or miles for travel) at hundreds of different stores. All you’ll have to do to receive the statement credit is add the offer to your card and use that card when you check out, online or in person. You’ll later see a statement credit on your card that will take money off your bill.

For instance, I recently had an Amex Offer to receive $100 off at Net-a-Porter, an online clothing retailer. After my purchase, I received this statement credit.

Using Credit Card Points to Offset Your Bill

The points you earn for spending on a rewards credit card can also be turned into statement credits, in some cases. 

You can “use the points, miles or cash back you earn on a credit card to cover past purchases,” says Benét Wilson, Senior Credit Cards Editor at The Points Guy, who cautions that redeeming points this way results in less value per point than using them for travel.   

“The pandemic will subside eventually and travel is really the best way to redeem those points and miles,” Wilson says. “However, if you have a huge stack, you may want to consider a statement credit — but know that you’re not getting the best value when you do that.”

Like a regular statement credit, this will show up in your account as a transaction  with a minus sign in front. Keep in mind that you’re still required to make at least the minimum payment on the card, even after redeeming points to offset purchases.

Using Your Credit Card’s PreCheck Application Fee Credit

Another common statement credit is for application fees related to travel, such as TSA PreCheck or Global Entry. Many popular credit cards, including the Chase Sapphire Reserve®, Citi Prestige® Card* and Capital One Venture Rewards Credit Card, offer statement credits for PreCheck, which speeds up security checks at airports, or Global Entry, which gives access to faster immigration lines when returning from overseas to the U.S. This means that if you apply for the program, and pay the application fee with a credit card that reimburses you for it, you’ll later receive a statement credit.

Using a Cashback Credit Card

Cashback cards are a prime example of earning statement credits, especially on your everyday purchases. “If you’re holding a cashback card, you made the choice that a statement credit was the route you wanted to take with the cash back you earn on it,” Wilson says.

For example, if your card earns 6% cash back on groceries and you spend $6,000 a year, you’ll get $360. “That money can be used to ‘pay’ for past purchases as a statement credit,” Wilson adds.

Whatever form they come in, statement credits can be an especially helpful money-saving method to lower your credit card bills.

*All information about the Citi Prestige® Card has been collected independently by NextAdvisor and has not been reviewed by the issuer.