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What is a statement credit and how can you take advantage of it?

If you have a credit card, odds are you've received a statement credit. Here's an explanation of what a statement credit is and why you may receive one.

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Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We earn a commission from affiliate partners on many offers, but not all offers on Select are from affiliate partners.

In the day to day of using your credit card, you've most likely seen a statement credit on your bill. More and more card issuers are offering special statement credits to lure in new customers as an added value to sign up for a card that comes with an annual fee. But even if you don't have a card that offers such a fancy perk, at some point you've probably returned an item purchased with your card, in which case you're likely to receive a statement credit.

Statement credits typically appear in green and as a negative transaction on your online account to indicate you're receiving a credit. When you receive a statement credit, your balance decreases.

A statement credit can post to your account anywhere from the next day to several weeks later. As you can see in the example below, my Amex dining credit posted two days after I made the qualifying purchase at Shake Shack.

Alexandria White | CNBC

Why you might receive a statement credit

Here are the most common ways you may receive a statement credit.

Returns

Probably the most common reason to receive a statement credit. If you return an item that you purchased with your credit card, you'll receive a statement credit equal to the refund amount. Statement credits for returns can take up to a few weeks to post, depending on whether your return the item in-store or ship it back.

Alexandria White | CNBC

Credit card shopping perks

Many credit card issuers provide exclusive discounts at dining, retail and travel merchants. These offers typically give you either a percentage or set dollar amount of cash back, credited to your account. For example, an offer may state: Receive 10% back at Starbucks, until you earn a maximum of $3 cash back. If you spend $30 at Starbucks, you can expect a statement credit worth $3.

Rewards redemptions

If you have a cash-back or rewards credit card, you can redeem cash back, points or miles for a statement credit. This helps offset the cost of your bill. But you're still required to make the minimum payment.

Alexandria White | CNBC

Global Entry or TSA PreCheck application fees

Credit cards offer statement credits for Global Entry or TSA PreCheck application fees. These credits are worth $100 or $85, respectively, and offered every four or five years, depending on which card you have. You receive this credit after you submit and pay for an application, and it can take a few weeks to see the cost credited on your account.

Annual travel credits

Some credit cards offer annual statement credits to cover the cost of eligible travel expenses. The Chase Sapphire Reserve®, for example, offers cardholders an annual $300 travel credit to use on purchases like hotel bookings, airfare, transit and more.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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