Though it can be tempting to just ignore your credit card statements because there are terms and abbreviations you don’t understand, reading them ensures you’re not being overcharged for your purchases. The designation "CR" next to an item means it’s a credit to your account rather than a charge for which you have to pay, like a purchase you made with the card.
Why "CR" Might Appear on Your Statement
Credits appear on your credit card statement for a variety of reasons including returns, credit card rewards and payments. For example, if you purchased new dress shoes with your credit card for $500 and then decided they didn’t fit right and returned them, your credit card statement would show a credit for $500. Or, if your credit card company offered you a sign-up bonus of a $200 statement credit if you met certain spending criteria, when you satisfy the requirements the $200 credit shows up on your credit card statement. When you make your payment each month, the amount you pay also counts as a credit on your statement.
Impact of Credits
Any credit on your statement reduces the amount you owe from the purchases you've made with your card. If the credit on your statement is a relatively small amount, it will probably get used up very quickly and you won’t have an ongoing credit when you get your credit card statement. For example, say you returned jeans that cost $100 this month, but you also charged $1,300 in new purchases on your card. Your $100 credit for the jeans will offset a portion of the new purchases, and you’ll only have a balance of $1,200 due.
If, however, you have a larger credit or minimal spending during a given statement period, your credit might exceed the amount you owe. In that case, you can let the credit carry forward to offset against future purchases, or you could request a check from the credit card company. Your credit card company will usually send you a check if you have a credit for more than six months. For example, say you returned the new fridge for which you paid $1,400, and you only spend $200 on new purchases. Your $1,400 credit wipes out the $200, with $1,200 left over. You could leave the $1,200 credit on your card, and then as you have future purchases you’ll use the credit to offset them, or you could request a refund check from the credit card company.
Based in the Kansas City area, Mike specializes in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."