What you should know about credit card refunds

Jodie Humphries-29/11/2020- 4 min read

Sometimes cardholders need to request a refund or a reversal on their transactions, such as when a purchased product is faulty or if you’ve been overcharged. In many cases, simply returning the product or cancelling a transaction can trigger a reversal of the charges billed to your credit card. But sometimes you will need to reach out to your card issuer and make a request for a refund.

Credit card companies generally have well-defined policies regarding when and how to get a refund on credit card transactions. Ideally, you should find out about these as soon as you receive the credit card, or at least before you start using the card. You’ll also need to take a few precautions to avoid unauthorised use of your credit card, even by family members. Keeping track of your credit card transactions can be helpful, and your credit card issuer may send transaction alerts through email or mobile messages.

How long does a credit card refund take?

The time it takes to process a credit card refund can depend on the nature of the refund. Typically, you may request a merchant for a refund or, if that doesn’t work, ask your credit card company for a chargeback.

Getting a refund from a merchant takes around 5 business days. Suppose you’ve returned a dress you purchased online within the specified duration and the merchant issued a refund to your credit card. Once a reversal of charges is initiated, you’ll probably see the transaction listed on your credit card account within the week. If you’re accidentally billed twice for the same transaction, possibly due to a point-of-sale machine error, you can request the merchant for a refund if the charges are not automatically reversed.
Getting a refund from your credit card issuer can happen in a few days, or it can take months. Consider these two cases
Loss or theft of credit card: If you lose your credit card or if someone steals it, you may see fraudulent transactions on your credit card statement. You’ll need to report the loss or theft to your credit card company before you can get a refund for these charges. The card issuer will investigate to confirm that the charges are indeed fraudulent, and not the result of you giving your credit card or its details to someone else. Your credit card company may require you to report loss or theft of your card within a stipulated time, and if you fail to do so, you may have to bear the liability for fraudulent transactions.
Chargebacks: Suppose you try to return a product but the merchant refuses to refund the money. This can happen, for instance, if they think you’ve violated their returns policy or not returned the product in the expected condition. However, if you feel you are rightfully entitled to one, you may request your credit card company for a chargeback, or reversal of the charges. For this, your dispute with the merchant must be formally resolved, and you will be asked to provide evidence that the refund refusal is unjustified.

Credit card companies are required to give the merchant time to respond, which can be as long as 45 days. As a result, if the transaction is reversed, it may not show up for up to two months. A point to note here is that you may have to pay the charge as part of your credit card bill to avoid paying any late fees or interest on the amount. Once you are refunded the amount, it will reflect in a future credit card statement and bring down your credit card bill.

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Jodie Humphries

Content Writer

One of RateCity's Personal Finance writers, Jodie has worked for banks and comparison websites for a number of years, and now spends her time working on ways to make money make sense for everyone else.

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Losing your credit card is a serious situation, and could land you in financial trouble. Here is a simple guide detailing what to do when you lose your credit card.

Lock you card – Contact your provider and inform them about your lost credit card. From here lock, block or cancel your card.

Keep track of transactions – Look out for unauthorised credit card transactions. Most banks protect against fraudulent transactions.

Address recurring charges – If your card is linked to recurring charges (gym membership, rent, utilities), contact those businesses.

Check credit rate – To ensure you’re not the victim of identity theft, check your credit rating a month or two after you lose your credit card.

Once you've compared credit card interest rates and deals and found the right card for you, the actual process of getting a credit card is quite straightforward. You can apply for a credit card online, over the phone or in person at a bank branch.

For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.

Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.

Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.

Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.

Generally, when we talk about credit card interest, we mean the purchase interest rate, which is the interest charged on purchases you make with your credit card.

If you don’t pay your full balance each month (or even if you pay the minimum amount), you are charged interest on all the outstanding transactions and the remaining balance. However, interest is also charged on cash advances, balance transfers, special rate offers and, in some cases, even the fees charged by the company.

The interest rate can vary, depending on the credit card. Some have an interest-free period, otherwise you start paying interest from the day you make a purchase or from the day your monthly statement is issued. So avoid interest by paying the full amount promptly.

There's no such thing as a free lunch. All credit cards come with associated costs when used to make purchases, even if it’s simply the cost of making repayments.

However, many lenders offer incentives for customers such as a $0 annual fee or 0 per cent interest on purchases during an introductory period. Additionally, paying off your balance in full during an interest-free period means you could only have to pay back the cost of purchases without interest. You could also be eligible for additional rewards such as cashback during that time, saving you more money.

Your credit card will be charged interest when you don’t pay off the balance on your credit card. Your card provider or bank charges you the individual interest rate that is associated with your card, which is usually between 10 and 20 per cent.

The interest will be added onto your bill each month or billing period if you don’t pay off the balance, unless you are in an interest-free period.

You will be charged interest on anything that hasn’t been paid for inside the interest-free period. Usually you will receive a notice on your bill or statement saying you will be charged interest so you have some form of notice before you’re charged.

You do not need a credit card to get a loan, but you usually need to have a credit history. Without a credit history, a financial institution cannot assess your ‘credit worthiness’, or your capacity to pay off the loan.

If you don’t have a credit card, your credit history can reflect any record of paying off an asset. Without any credit credit history, you’re limited in the type of loans you can apply for. But you may be able to obtain a secured loan against an asset. For more information on improving your credit score, go here.

These are the current annual fees on your existing credit card.

You can get money from a credit card, but generally it will cost you.

Withdrawing money from a credit card is called a cash advance, as it operates more as a loan than a simple cash withdrawal. Because it is a loan, you may be charged interest on your cash advance as soon as you make the withdrawal. Interest rates are also usually much higher for cash advances than standard credit card purchases.

In addition to the interest rate, you may also be charged a cash advance fee. This could be a flat rate, or a percentage of your total cash advance. If you are considering a cash advance, make sure to add up how much it will cost you before committing.

If you’re wondering about how to make a credit card online application, here are some steps to follow:

Test the market. Many credit card options are available online. Compare providers by fees, interest and perks to ensure you’re getting the best deal.
Complete the application. Once you’ve selected a card, head to the provider’s website and complete the online credit card application form. Forms vary by providers.
Provide details. Most cards require you to meet age, residency, income and credit status condition, and you need to provide details like a bank account statement to prove this.
Review details. Ensure the information you’ve entered is correct.

Your ANZ credit card is considered expired only after the last day of the month and year marked on your card. For instance, if your card’s expiry date reads 03/22, it is valid until 31 March 2022 and expires on 1 April 2022. Typically, you should have received a new credit card by that date, and you won’t have to request a new card.

Once you get the new card, you should remember to switch any automatic payments you have - such as a utility or mobile phone bill - from your expired credit card to your new credit card. Equally, if you are using CardPay Direct to repay your ANZ credit card debt, you may need to update the credit card account details for that service as well.

In case the new card doesn’t arrive by the expiry date of your current credit card, you can call ANZ on 13 22 73 to find out the reason and if you need to request an expedited card. Please note that if you were planning to close your credit card account or request a credit card upgrade, you may need to call ANZ at least before the 25th of the month your current credit card expires in, as that’s when they may send you the new credit card.

Credit card fraud is a serious problem. If your credit card is compromised and you’re wondering what to do, here are a few precautionary steps to take.

Contact you credit provider – Get in touch will your credit card provider. If you feel your card has been compromised, you should be able to lock or block it.

Monitor your accounts – Keep an eye on your credit card accounts. Any unauthorised transactions could be a sign your credit card has been compromised.

Check your credit rating – It’s also important to check your credit rating, to ensure you’re not a victim of identity theft or some other financial mischief.

You can apply for a credit card online, over the phone or in person at the bank. Once you’ve compared the current credit card offers, the application process is quick and easy. Before you get your application started, you’ll need to gather your personal information like proof of ID, payslips and bank statements, proof of employment and details of your income, assets and liabilities. To be eligible for a credit card, you’ll need to be an Australian citizen over 18 and earn a minimum of $15,000 each year. Once you’ve applied for a credit card, you should get a response fairly instantly. If your credit card application has been approved, you should receive a welcome pack with your new credit card within 10-15 days.

You may want to increase your credit card limit for many reasons, such as having access to more spending money. However, if you are using the Orange One credit card issued by ING, you may not be able to do so.

ING customers can choose a credit limit of their preference when applying for the Orange One credit card. Depending on your financial situation, this limit can be anywhere between $1,000 and $30,000. If you qualify for a Rewards Platinum card, the minimum credit card limit will likely be $6,000.

Ideally, you should set your credit card limit knowing how much you can afford to repay each month and keep your expenses lower than this level. With most credit cards, you should have the option of requesting a credit card limit increase at a later time, although you will need to qualify for any increase. With an ING credit card, limit increases are out of the question (at the time this was published), which means you may want to apply for a higher credit card limit from the beginning. Remember that you have the option of decreasing your ING credit card limit at a later time.