Statement credits are reductions applied directly to your credit card balance. They often come as part of promotional offers or rewards programs. For example, travel credit cards might provide statement credits for travel-related expenses like airfare, hotel stays, or dining. These credits effectively act as a discount on your purchases, reducing the amount you owe.
Here are some ways statement credits are commonly applied:
1. Promotional Offers: Some cards offer sign-up bonuses in the form of statement credits if you meet a minimum spending requirement within a specified time frame.
2. Rewards Redemption: You can often redeem points or miles earned through a rewards program as a Statement Credit against certain categories of spending.
3. Purchase Erasers: Some cards allow you to use your rewards to “erase” or offset specific purchases, such as travel expenses, by applying a Statement Credit for the corresponding amount.
4. Automatic Credits: Some cards provide automatic statement credits for specific types of purchases, such as dining, travel, or subscription services.
5. Special Promotions: Credit card companies may offer limited-time promotions where you can earn statement credits for spending in certain categories or with specific merchants.
Statement credits are beneficial because they directly reduce your balance, making them a flexible and convenient way to save money.