Eli5: what happens if I buy something on a credit card, pay the balance to zero from a checking account, but then return the item and get refunded? Where does the money go?

Question

Eli5: what happens if I buy something on a credit card, pay the balance to zero from a checking account, but then return the item and get refunded? Where does the money go?

In: Economics

Answer 1

Assuming the retailer sends the refund to the credit card you used to buy it, you will have a credit balance, essentially a “negative” balance, on your credit card. Your balance will be below zero

You can then ask for a refund of that credit from the credit card company and return the money to your checking account. Or, you could spend the money on your credit card and it’ll take your balance back up to zero