[diyguy]

Originally Posted by binand

The ticket would mention the card number and the statement "no cash refunds".

The card refund would go as a credit payment to your next bill if you have timed it right. It would give you the same kind of revolving credit that folks are talking about here with Paytm.

[binand]

Originally Posted by diyguy

The card refund would go as a credit payment to your next bill if you have timed it right. It would give you the same kind of revolving credit that folks are talking about here with Paytm.

Still it is not clear to me how this ends up being an interest-free loan or revolving credit. If the refund goes as a credit in the NEXT statement, I have to pay the same amount in THIS statement - no? Maybe I am missing something here.

[DigitalOne]

Originally Posted by Ry_der

Just sharing a hack.

Suppose you have a credit card with a limit of 1.0 lacs. You have utilised 20000 Rs during the month. You still have 0.8 lacs in your card. For paying this 20000 amount you have generally 2 choices...
...Thanks.

Per the rules of Paytm (see attached image), the amount can be sent only to the card/bank from the wallet was credited. Which means that you can transfer it only back to the credit card account.

This hack might work only if you transfer to another Paytm account and from there to a bank account. Definitely not recommending this unethical practice though.

[rdst_1]

Originally Posted by DigitalOne

This hack might work only if you transfer to another Paytm account and from there to a bank account. Definitely not recommending this unethical practice though.

Please let me know how is it unethical.
Every credit card gives you a period of 45 days for which they don't charge any interest. If someone has found a proper legal way, which also doesn't harm anyone, then how is it unethical. I have used and helped friends abroad use the same loophole umpteen number of times using PayPal. My friends needed money urgently and this was the only way for them to raise money legally and without paying any interest. In their case, they wouldn't have even qualified for a loan as they were just students in a foreign land.

[BenjiRoss]

People used this method to pile up credit card points. So obviously it is a loss for the credit card companies.
While it may not seem unethical, it is a loophole that can be "abused".
It is up to the credit card companies and Paytm to plug this for their own good.

[Ry_der]

Originally Posted by DigitalOne

Per the rules of Paytm (see attached image), the amount can be sent only to the card/bank from the wallet was credited. Which means that you can transfer it only back to the credit card account.

This hack might work only if you transfer to another Paytm account and from there to a bank account. Definitely not recommending this unethical practice though.

Even if one does refund the money to his credit card from PAYTM, still it will be treated as a payment for current billing cycle. But PAYTM may block the card on their system.

[SilentEngine]

Originally Posted by rdst_1

Please let me know how is it unethical.
Every credit card gives you a period of 45 days for which they don't charge any interest. If someone has found a proper legal way, which also doesn't harm anyone, then how is it unethical.

The interest free credit period is valid only when you 'spend' using the credit card. If you were to use the card to get cash advance obviously you have to pay the interest. This trick basically circumvents that, and that's when it becomes questionable. What if everyone does this to perpetually rotate money and keep earning benefits like reward points? Who's paying for that?

Eventually there is a cost to this, and it's going to be collectively borne by all users in form of different fees, and people who end up paying that cost for their own genuine usages will be paying not just for themselves but also for others too who have gamed the system.

[diyguy]

Originally Posted by binand

If the refund goes as a credit in the NEXT statement, I have to pay the same amount in THIS statement - no?

Assume today is the 15th of the month and if you have a bill of 10000Rs to be paid by 25th. Now assume you have available credit limit on your card of say 12000rs left. Purchase train tickets or any product from an online portal for the 12000 Rs limit you have.
Your current due to be paid by 25th still remains at 10000rs, though your total due has gone up to 22000rs. Now cancel the tickets or return the product you ordered. You will get a refund on your card which comes in as a "credit or payment". This credit will offset the payment due by the 25th and so you will not need to pay the 10000rs that was due to be paid by the 25th.
However in your next months statement you will have a due amount of the 12000 minus whatever was left over from the credit amount that was adjusted against your initial 10000rs due. Hope it is clear

[binand]

Originally Posted by diyguy

Assume today is the 15th of the month and if you have a bill of 10000Rs to be paid by 25th. [...] Hope it is clear

Disclaimer: It has been a while since I looked at all this. Maybe the rules has changed of late (though I doubt it). Maybe it is even bank-specific. But as far as I know, merchant credits in a specific credit period are adjusted only against charges in that credit period and are not used to offset dues from past periods.

In the scenario you describe (and for the sake of explanation, let us assume the card's credit limit is 22,000), the refund coming from the portal will NOT be used to offset the amount due by 25th of the month. It will be used only to offset your purchase that you got refunded.

So let us run through the timeline once again:

5th - CC statement generated. Due = 10K, available credit = 12K
15th - online ticket purchase of 10K. Due = 10K, unbilled purchase = 10K, available credit = 2K
20th - refund credited of 10K. Here:
(a) You expect: Due = 0, unbilled purchase = 10K, available credit = 12K
(b) What happens: Due = 10K, unbilled purchase = 10K, unbilled refund = 10K, available credit = 12K

So you have to pay 10K on 25th, but in the next statement you will have 0 dues (since unbilled purchase and unbilled refund will cancel each other).

Here is Citibank's cardholder agreement: https://www.online.citibank.co.in/po...cardmember.pdf

Pay specific attention to 15.2(k). It clearly says:

"Non-customer initiated payment/credit such as merchant refunds, reward redemption credit/cash back, charge reversal, etc received into the account after statement generation are not considered as a credit to settle the payment towards Minimum Amount Due."

[diyguy]

Originally Posted by binand

"Non-customer initiated payment/credit such as merchant refunds, reward redemption credit/cash back, charge reversal, etc received into the account after statement generation are not considered as a credit to settle the payment towards Minimum Amount Due."

I stand corrected but I have always reduced due amounts by refunds or cancellations. It could be that the reversals may have been from a past statement and not the scenario that I had spoken about.
Recently My daughters SAT exam was cancelled in June '17 and the fee that I had paid in Jan had been reversed on my Citibank card. I rarely use the card and didn't notice that I had a credit of 8k or so lying on that account. I was told that I cannot do a cash withdrawal of this amount as it will incur a withdrawal fee. I had also attempted this during the recent cash withdrawal crisis of 2k per card per day. I had spoken to a citi support executive and said I will transfer in excess funds into my cards so I can withdraw 2k per day from my credit cards as well but was told the same thing that it will incur a withdrawal fee even if you have a credit balance on the card.

[SilentEngine]

Originally Posted by binand

Here is Citibank's cardholder agreement: https://www.online.citibank.co.in/po...cardmember.pdf



Pay specific attention to 15.2(k). It clearly says:



"Non-customer initiated payment/credit such as merchant refunds, reward redemption credit/cash back, charge reversal, etc received into the account after statement generation are not considered as a credit to settle the payment towards Minimum Amount Due."

I think this applies only to minimum amount due. If it so happens that total credit/cashback exceeds the total amount due, you are only required to pay the minimum amount due, that's how I interpret this.

From my recent example, I had credit card bill of 26k. Next month I received a cashback of 3k from Flipkart (it was an offer, not any refund). When the SI to pay total amount got executed, it only deducted 23k, even though total bill was 26k.

[condor]

We discussed the Convert-to-EMI option. Coming to the other option, what are your views on a balance-transfer between cards ?

[binand]

Originally Posted by SilentEngine

I think this applies only to minimum amount due. If it so happens that total credit/cashback exceeds the total amount due, you are only required to pay the minimum amount due, that's how I interpret this.

Yes, I started thinking about that "Minimum Amount Due" constraint; and have come to the conclusion that it is sufficient to make the original premise, of free rollover credit, impractical. This is because of the condition in 15.2(f) that all credits will be adjusted against card charges & interest, first.

If you only make the minimum payment then there is late payment charges and interest applied to your card, so the refund will be adjusted against these. The net effect is that to cover a 10K card outstanding you need to use the "refund trick" with an amount that is greater than 10K; so the compounding effect will kick in quickly.

[Pancham]

Kotak Mahindra bank seems to have the worst service in terms of wrong/fraudulent transactions. I bought petrol worth 700 bucks an hour back and now I see it got charged twice in my card. I punched the pin only once. I don't how it was charged twice. And there is no one in the customer service desk to answer my call. Any idea guys how to get this sorted. This is my first time with wrong/fraudulent transactions.

[sammyboy]

Originally Posted by Pancham

Kotak Mahindra bank seems to have the worst service in terms of wrong/fraudulent transactions. I bought petrol worth 700 bucks an hour back and now I see it got charged twice in my card. I punched the pin only once. I don't how it was charged twice. And there is no one in the customer service desk to answer my call. Any idea guys how to get this sorted. This is my first time with wrong/fraudulent transactions.

Most probably the amount should get reversed in a day or so. If that doesn't happen,
keep trying the desk, drop a couple of emails too if there is any Id shared. Atleast you will have some record.
Kotak has been the worst bank I have dealt with , loans, mutual funds, savings bank, have had issues with all of them.
Stay away once this is sorted.