What Happens to Your Credit Card Points When You Get a Refund?

Earning rewards on credit cards are great, but what happens to those points when you get a refund? Here’s what you need to know, and 5 cards that will help you replenish those balances.

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Updated July 17, 2024
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Refunds are often a good thing. For instance, after a wave of shopper’s remorse, you return that overpriced sweater and breathe a sigh of relief after the money is safely returned to your account. Or, after getting a small refund check from the IRS, you treat yourself to a night out on the town. Fun, right?

However, refunds are not always a good thing. One question that comes up frequently among rewards credit card enthusiasts is, “when you get a refund on a credit card, do you lose points?”

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What happens to your points when you get a refund?

The unfortunate answer is that, in most cases, the points you earned on the purchase will be deducted from your credit card points balance on your next statement. That means that if you spent $100 on your credit card for that red sweater and you earned 100 points, those 100 points will be subtracted when the refund hits your card.

And for good reason. Credit card issuers need to do good business in order to offer high earning cards with lucrative bonuses. If they didn’t keep a close eye on points from refunds, they’d become easy fraud targets.

While its a bummer to see your points balance go down when you get a refund, it can be downright devastating if you get a refund on a new credit card.

Let’s say you get a shiny new card that offers a juicy bonus when you spend $3,000 in the first three months. You spend $1,000 per month on the card, and you’re on track to hit that $3,000 mark in three months. All is good until you return that $100 red sweater. The refund hits your card, and when that statement closes in your third month, you’ve only spent $2,900. You’ve now missed the spend requirement, and you don’t qualify for that nice bonus — facepalm!

Is there ever a situation when I can keep the points?

Yes! But you can’t have your proverbial cake and eat it too. Here’s what I mean.

In the case of the red sweater, there is a way that you can return it to the store and still keep the points — if you choose to get refunded in the form of store credit instead of putting the balance back on your credit card. In this scenario, since the credit card is only involved in the purchase side of the transaction, they never know that you changed your mind about the sweater. Therefore, they can’t take the points back.

You can come back and choose a different item that you really want at this store, and you get to keep your points. But if you really needed that money back into your account, instead of tied up in credit at a specific store, you’d be out of luck. This isn’t a strategy to earn a bonanza of points, because your cash will still be tied up in the store credit.

Another interesting scenario is if you book travel through a credit card rewards program. If you book a refundable flight or hotel with your Chase Ultimate Rewards points, for example, Chase collects your points and then pays the airline or hotel cash on your behalf. Since the airline receives your booking from Chase, they don’t know if you’ve used points or cash to book. If you cancel your flight, the airline will send the refund in cash instead of crediting the points back to your account.

4 rewards cards that help you rack up a lot of points

Even if you lose some points with a refund, there are lots of easy ways to replenish your stash. Next time you go shopping, you could “stack” your rewards by collecting points not only from your credit card but also from a lucrative shopping portal. (More details on stacking here.) You can also choose to apply for a new card that will help you rack up points fast.

Here are four options to help supercharge your points balances.

Card name Welcome offer Annual fee
Chase Sapphire Preferred® Card Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening $95
Hilton Honors American Express Surpass® Card Earn 130,000 Hilton Honors Bonus Points plus a Free Night Reward after spending $3,000 on purchases in the first 6 months (offer ends 7/31/2024) $150 (Terms apply)
Capital One Venture Rewards Credit Card Enjoy $250 to use on Capital One Travel in your first cardholder year, plus earn 75,000 bonus miles once you spend $4,000 on purchases within 3 months from account opening $95

Chase Sapphire Preferred® Card

This now-classic card consistently ranks as a favorite year after year, and it’s easy to see why. For starters, it boasts a generous welcome offer. New cardholders can earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening — worth $750 in travel rewards when you book through the Chase travel portal!

One of the reasons that the Chase Sapphire Preferred® Card is such a crowd favorite is because Chase Ultimate Rewards points are straightforward and easy to redeem. Just use them to book your travel directly in the Chase portal for a fair value of 1.25 cents each for hotels, airfare, rental cars, cruises, and experiences. Or, you can choose to transfer directly to many large travel partners like Marriott, United, and Southwest.

While this isn’t the top-earning card out there, cardholders earn 5X points on travel purchased through Chase Travel℠; 3X points on dining, select streaming services, and online groceries; 2X points on all other travel purchases, and 1X points on all other purchases. Each year on your card anniversary, you will also earn bonus points equal to 10% of the total purchases you made in the previous year.

If you want a nice welcome offer and flexible points that are easy to earn and redeem, the Chase Sapphire Preferred deserves a spot in your wallet.

Read our full Chase Sapphire Preferred card review.

Hilton Honors American Express Surpass® Card

Talk about an eye-popping welcome offer! American Express has three different versions of the Hilton Honors credit card, and the mid-range Hilton Honors American Express Surpass® Card is a great choice to earn a lot of points. You’ll earn 130,000 Hilton Honors points after spending $3,000 in the first 6 months, and the points just keep coming after that.

Surpass cardmembers earn 12X points on eligible purchases at participating Hilton hotels or resorts; 6X points at U.S. restaurants, U.S. supermarkets, and U.S. gas stations; 4X points on U.S. online retail purchases; and 3X points on all other eligible purchases. Many credit cards only earn 1X points on many categories, so this is substantially higher.

But here’s where it gets really good: when you combine your 12X earnings at eligible purchases at participating Hilton hotels or resorts with the promotions that Hilton regularly has going for double or even triple points on hotel stays, you’ll soon have enough points for a fabulous Hilton vacation.

As a cardmember, you’ll be granted automatic Gold status with Hilton, which gives you great perks like free breakfast, room upgrades, WiFi, and late checkout. Plus, you’ll get the 5th night free when you book your stay with points.

Read our full Hilton Honors American Express Surpass Card review.

Capital One Venture Rewards Credit Card

Easy to earn, easy to use. The Capital One Venture Rewards Credit Card is a popular travel rewards credit card because it’s just so simple.

After the great kick-start you can get when you enjoy $250 to use on Capital One Travel in your first cardholder year, plus earn 75,000 bonus miles once you spend $4,000 on purchases within 3 months from account opening, it’s easy to keep racking up the Venture rewards. Cardholders earn 2 miles per dollar on every purchase, every day, 5 miles per dollar on hotels and rental cars booked through Capital One Travel and 5 miles per dollar on Capital One Entertainment purchases through 12/31/25.

It’s just as simple to redeem your Venture miles as it is to earn them. You can use them to book new travel directly through Capital One, cash-out miles for gift cards, or use them to cover your travel purchases with statement credits. All of these redemption options give you the ability to lock in a fixed value of one cent per mile.

With this card, there are no seat restrictions, no worry about award availability on certain dates, and no special partner portal to navigate. Just log into your account, click on your miles balance, and redeem right there.

Read our full Capital One Venture Rewards Credit Card review.

FAQs

How does a refund to a credit card work?

If you make a purchase with a credit card and later need to cancel or return that purchase, you can expect a refund to be posted to your credit card account. This refund is not immediate and may take between two and 10 business days, depending on the merchant and your credit card issuer. Any credit you’re due will be applied to your current statement cycle.

What happens if I get a refund on a credit card with no balance?

Refunds will be applied to your current credit card statement balance. If there is no balance on the card, the refund will show up as a credit on the account (a negative statement balance) and the funds can be applied to future charges. Alternatively, you can usually request an ACH or paper check refund from your issuer instead.

What happens if a charge is refunded to my credit card and I already used the rewards?

If you make a purchase that earns you rewards with your credit card issuer, and then later return that purchase, the points you earned will be deducted from your points or cashback balance. If you have already used the rewards and don’t have a large enough balance, the retracted rewards will show up as a negative points balance on your account. As you earn new rewards, they will be applied to this deficit first. In short, you will need to earn your way back to a positive rewards balance before you have any further rewards available to redeem.


The bottom line on credit card refunds and points

The bad news is that you can’t double-dip when you return something for a refund — you can’t get the cash back and keep the points too. And if you have a new card and you’re working on earning a welcome bonus, be vigilant about refunds that may hit your card. Always spend a little more than the bare minimum, to be safe.

But when your rewards balances do go down, there’s always a way to build them back up! The five cards we outlined above can help you grow your points and miles quickly, if you spend wisely. If these credit cards don't seem like a good fit for you, then check out our guide to comparing credit cards and find the right one for your lifestyle.

Easy-to-Earn Unlimited Rewards

Benefits

Card Details

  • Earn 25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases
  • Earn 1.5 points per $1 spent on all purchases
  • Longer intro APR on qualifying purchases and balance transfers
  • No foreign transaction fees
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  • Earn unlimited 1.5 points per $1 spent on all purchases, with no annual fee and no foreign transaction fees and your points don't expire as long as your account remains open.
  • 25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases.
  • Use your card to book your trip how and where you want - you're not limited to specific websites with blackout dates or restrictions.
  • Redeem points for a statement credit to pay for travel or dining purchases, such as flights, hotel stays, car and vacation rentals, baggage fees, and also at restaurants including takeout.
  • 0% Intro APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the Intro APR offer ends, a Variable APR that’s currently 19.24% - 29.24% will apply. A 3% Intro balance transfer fee will apply for the first 60 days your account is open. After the Intro balance transfer fee offer ends, the fee for future balance transfers is 4%.
  • If you're a Bank of America Preferred Rewards® member, you can earn 25%-75% more points on every purchase. That means instead of earning an unlimited 1.5 points for every $1, you could earn 1.87-2.62 points for every $1 you spend on purchases.
  • Contactless Cards - The security of a chip card, with the convenience of a tap.
  • This online only offer may not be available if you leave this page or if you visit a Bank of America financial center. You can take advantage of this offer when you apply now.
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Earn 25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases

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Author Details

Erin Hurd

Erin has spent over a decade showing readers unique ways to make the most from their investments and personal finances. She’s a writer and editor whose work has been featured in many large investment publications, including International Living and The Daily Reckoning. She's passionate about harnessing the power of credit card rewards to travel the world. When she's not writing, she's planning her next adventure for her family of four using points and miles. She helps lead a large social media group dedicated to award travel and thrives on teaching others how to use points and miles to take dream trips.