“Managing Credit Card Rewards: Returns and Their Impact”

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Understanding Credit Card Rewards and Returns

At O1ne Mortgage, we prioritize consumer credit and finance education. This post aims to provide an objective view to help you make the best decisions regarding your credit card rewards. For any mortgage service needs, call us at 213-732-3074.

What Happens to Credit Card Rewards When You Return a Purchase?

When you return a product purchased with a credit card, the money is refunded to your account. However, the rewards earned from that purchase are generally deducted from your points balance. For instance, if you return a $75 item for which you earned 300 points, your statement will show a “-$75” and “-300 points”.

Can You Ever Keep the Rewards?

You can keep the rewards if the merchant issues a gift card or store credit instead of a refund. In this case, the transaction amount remains on your credit card balance, and the rewards are still yours. Similarly, if you exchange items, the points deducted from the refund are “re-earned” with the new transaction.

What Happens if You Already Used the Rewards?

If you use the rewards before making a return, your card issuer will deduct the rewards, potentially resulting in a negative balance. Future payments and purchases will balance out the rewards deficit until it reaches zero.

Use Your Credit Cards Responsibly for Maximum Benefit

Credit card rewards can offer cash back, travel discounts, and other perks. However, these benefits may not be worth it if you charge more than you can afford to repay in full each month. Paying interest on your credit card transactions can offset any value you receive from rewards.

Making regular, on-time credit card payments can help build your credit, as payment history makes up 35% of your credit score. Additionally, aim to keep your balances low, as your credit utilization rate accounts for 30% of your credit score.

For more information on managing your credit and mortgage services, contact O1ne Mortgage at 213-732-3074. We’re here to help you make informed financial decisions.

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