What Happens if You Get a Refund on a Credit Card and You Have No Balance?

How does a refund work on a credit card?
If you’ve used your credit card to pay for goods or services but have changed your mind or are dissatisfied with the product or service you’ve received, you may have the right to request a refund.*
Once the refund has been confirmed, the money will be sent to the credit card that you used to make the original transaction. It’s usually a straightforward process – but what happens if you’ve already cleared your credit card balance in full?
What happens if you get a refund on a credit card with no balance?
What happens if the credit card you used has since been replaced or cancelled?

thimbl explores.

I’ve cleared my credit card balance, but am due a refund; what happens in this situation?

‘What if I get a refund on a zero-balance credit card?’ is a frequently asked question.
If you’ve received a refund but have already paid off your credit card, the money refunded will place you in a ‘negative balance’. This means that your credit provider owes you money, rather than the other way round.
In this situation, you have two options:

1. Allow the refund to remain on your credit card and use it towards the cost of your next purchase; or
2. Request that the refunded amount be transferred to your current account.

Can I ask that my refund be sent to another credit card or a debit card?

No, the refund must be issued to the credit card that you paid with.
The exception to this is if your credit card has been replaced, which we explain in further detail in the section below.

What happens if I get a refund on a credit card that has been replaced?

In this scenario, as long as the credit card is a like-for-like replacement issued by the same provider, your refund should be automatically sent to your new credit card without any issues.

What happens if I get a refund on a credit card that has been cancelled?

If you’re due to receive a refund on a credit card that’s been cancelled since you made the purchase – and has not been replaced by the same provider - you will most likely need to contact your provider to make them aware of the situation. You’ll usually be sent a cheque covering the refund amount. Remember, a credit card refund cannot be paid to a different credit card or a debit card.

How long does a refund take on a credit card?

This will depend on the merchant and your credit card provider, but generally, once a refund has been confirmed, you can expect it to take between 3 and 7 working days for the money to appear back in your account.

What is Section 75?

Under the Consumer Credit Act 1974, Section 75 protects credit card purchases between the value of £100 and £30,000 in the event of an issue after sale.
Applying for a Section 75 refund is the next step to take if you have tried to resolve the issue with the seller, but your request has been unsuccessful, or the company has since gone into administration.
To apply for a Section 75 refund, you’ll need to contact your credit card provider. If your claim is successful, your credit card provider will refund the money back onto the credit card that was used to make the purchase.

You can find out more about Section 75 and how to start a claim in our guide.

What should I do if I’m worried about my finances?

Please know that you can contact any of the following organisations for free, impartial money and debt advice: StepChange, MoneyHelper, Citizens Advice, and National Debtline.

*For further information on the options that could be available to you if you’ve changed your mind about a purchase, please see this useful guide put together by Citizens Advice.