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Okay, this isn't so much about the money, but the principal of the thing.

Because of an accidental overpayment, I ended up with a credit balance of $0.38.

My statement shows a transaction labeled "SMALL BALANCE ADJUSTMENT DEBIT ADJUSTMENT" in the amount of $0.38.

Are they allowed to do that?

The company is Elan Financial Services.
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Because of an accidental overpayment, I ended up with a credit balance of $0.38.

My statement shows a transaction labeled "SMALL BALANCE ADJUSTMENT DEBIT ADJUSTMENT" in the amount of $0.38.


Are you sure you didn't underpay by $0.38? A 'debit' on credit card statements is usually shows that you have spent money by purchasing something, so a 'debit adjustment' could be adjusting the amount you owe downwards.

Anything showing a positive balance on your credit card statement is actually money that you owe. A credit balance would be shown as a negative balance on the statement.

Are they allowed to do that?

Probably, but you would need to look at your cardmember agreement to be sure. Unfortunately, I was unable to find a copy of any Elan credit card agreements online. But small balance adjustments are typically allowed. That said, I have had multiple credit cards provide me adjustments when I have slightly underpaid - usually for less than $1, although a few have been for something less than $5. On the occasions where I have slightly overpaid, or maybe I paid and there was also a credit given for a return, so that I ended up with a credit balance, the credit card company has usually let that credit ride. At some point, if you have a large enough credit balance, and it's sat there for longer than, say, a month, credit card companies will often cut a check and send it to you.

AJ
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Are you sure you didn't underpay by $0.38?

I just checked the previous statement, which includes this wording:

Your account has a credit balance of $0.38.
Please DO NOT SEND a payment for this amount.


you would need to look at your cardmember agreement to be sure

On their website, I just clicked the link for "cardmember agreement" and got this:

You can expect to receive your Cardmember Agreement via U.S. Mail within 7-10 business days.

Really?! It's 2019, and they can only send the agreement by US Mail?

If anyone is interested, I'll post a follow-up after I get the agreement.
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I just checked the previous statement, which includes this wording:

Your account has a credit balance of $0.38.
Please DO NOT SEND a payment for this amount.


Since the credit was on the previous month's statement, that implies that you left it sitting there for at least 1 month, possibly longer. All you would have had to do to capture that $0.38 while it was sitting there would have been to purchase one thing on the credit card, and then immediately make a payment on their website in the amount that you charged, minus the $0.38. How long did you let the credit sit?

AJ
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I wouldnt be surprised if you got a $0.38 check in the mail at some point in the next 30-60 days.
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Really?! It's 2019, and they can only send the agreement by US Mail?

With several financial institutions I deal with, I can receive documents like the cardholder agreement electronically only if I opt-in agree to it. Perhaps if you look under the communication preferences section of your online account there is such an option here.

I believe there is some regulation requiring hard copy documents to me mailed unless you explicitly authorize other delivery.

HTH,

- HCF
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<<My statement shows a transaction labeled "SMALL BALANCE ADJUSTMENT DEBIT ADJUSTMENT" in the amount of $0.38.

Are they allowed to do that?>>


Why don't you try the same thing?



Seattle Pioneer
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It was probably there at least 2 months.

I like getting a statement monthly, but they don’t generate* statements when the balance is zero and there’s no activity.

So I thought I’d let the overpayment sit as a way of guaranteeing statements.


* It’s not just that they don’t mail it. They don’t even have one online. It’s odd logging in and seeing just 5 or 6 statements for a 1 year period.
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It was probably there at least 2 months.

I like getting a statement monthly, but they don’t generate* statements when the balance is zero and there’s no activity.


Correct - there has to be some activity (a purchase, a payment, a return, interest being charged, etc.) for credit card companies to be required to generate a statement, with the caveat that they are required to send a minimum of 1 statement each year, even if there is no activity all year.

So I thought I’d let the overpayment sit as a way of guaranteeing statements.

As you have seen, credit card companies don't just let customer credits sit there. After (generally) 2 or 3 cycles, they will send you a check for the balance. They will usually send the check sooner if you call and ask for it. That said, with a $0.38 credit, I'd say it's probably 50/50 whether they will actually send you a check, since the $0.38 won't even pay for a stamp any longer, and there may be a 'small amount write-off' in your user agreement. However, as HaltCatchFire indicated, I wouldn't be that surprised if you got a check for $0.38 in the mail one of these days.

If your real goal is to get a statement every month, a better option would be to set up a recurring charge against the card every month or every other month. For instance, water bills are often every other month, and it's a bill that you will be paying anyway (I hope!), so it's not like you're spending over and above what you would normally expect. So, if your water bill is every other month and you can set it up to be paid for by this card, and then you pay the card off after you get the statement, you should get a statement every month.

AJ
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A few years ago we had a deposit at our shop that was 20 or so checks. We found that we had added it wrong and it should have been 9+ dollars more. We called the bank and they said that any deposit with a less than 10 dollar error they just used the amount we said it was and put the rest in a short/over account.

I called the other 2 banks in our town and their deposit error adjustment was anything less than 15 dollars! I was shocked. They did explain that if I had added them and my deposit had been 9+ dollars short they would have used my amount. It just wasn't cost effective to look for the error.

It crossed my mind that I could have addition errors of a plus under 9 dollars more often and reap the benefits. When I mentioned this to the bank manager, she said that would trigger an odd occurrence and it would have been investigated.

Now they run the checks through a machine at the bank so deposit errors are found at the time of the deposit.
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A "credit balance" means that he OWES them the thirty-eight cents. It's on their books in the Credit column of the Accounts Receivable account.

If they adjusted it, and told him not to pay it, then they basically just gave him the money.

xtn
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A "credit balance" means that he OWES them the thirty-eight cents. It's on their books in the Credit column of the Accounts Receivable account.

If they adjusted it, and told him not to pay it, then they basically just gave him the money.


Sorry, xtn, you're incorrect on this. The money that the consumer owes to the credit card company is 'the balance' - not 'the credit balance'. Payments on credit cards are 'credited' to the account to pay 'the balance'. If too much is 'credited' toward 'the balance' due to an overpayment, the money owed to the consumer becomes 'the credit balance'.

AJ
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Sorry, xtn, you're incorrect on this.


Meh. It's happened once before and it will probably happen one more time before I die.

But...I mean...are you sure? I would think that if you've over payed and they owe you money, they would call it a debit balance. I mean, that's how the accounting terminology works.

xtn
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But...I mean...are you sure? I would think that if you've over payed and they owe you money, they would call it a debit balance. I mean, that's how the accounting terminology works.

From the issuer's point of view, it's a debit. But from the consumer's point of view it's a credit, because it's money that the consumer is owed.

AJ
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From the issuer's point of view, it's a debit. But from the consumer's point of view it's a credit, because it's money that the consumer is owed.


Right. But issuers don't use the terminology as if it's from the consumer's point of view. Otherwise a card that is primarily intended to let you borrow their money wouldn't be CALLED a credit card in the first place.

They're saying, "You have a credit balance [on our books]."

xtn
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Right. But issuers don't use the terminology as if it's from the consumer's point of view. Otherwise a card that is primarily intended to let you borrow their money wouldn't be CALLED a credit card in the first place.

The problem is that accounting terminology isn't being used strictly from one party's point of view. It would be too confusing for most consumers if they were told that they had a 'debit balance' so they shouldn't pay, or that they had a 'credit balance due' so they had to make a payment. That's because consumers DO look at it from their point of view, even if the issuer doesn't.

Payments on a credit card show as subtracting from the balance, but they are called 'credits', as in - "The payment was credited to your account on 3/1/19." So when a consumer ends up with a negative balance by overpaying, it's called a 'credit balance' since it resulted from crediting more than the balance due.

AJ
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The problem is that accounting terminology isn't being used strictly from one party's point of view. It would be too confusing for most consumers if they were told that they had a 'debit balance' so they shouldn't pay, or that they had a 'credit balance due' so they had to make a payment. That's because consumers DO look at it from their point of view, even if the issuer doesn't.

Payments on a credit card show as subtracting from the balance, but they are called 'credits', as in - "The payment was credited to your account on 3/1/19." So when a consumer ends up with a negative balance by overpaying, it's called a 'credit balance' since it resulted from crediting more than the balance due.



On MY card statements, when they owe me money, they call it a credit balance and show a negative dollar value. That's really a debit balance on their books, but indeed they do play fast and loose with the terminology in order not to confuse the masses that don't know accounting terminology. But it's still accurate in the sense that a negative credit balance is effectively the same thing as a positive debit balance.

And you're right, your payments are called 'credits,' but that's in the sense of, "Hey, we gave you credit for the money you sent to us," and not in the sense of accounting terminology. It's a stupid, confusing practice if you ask me.

But still, I'll bet a cool nickle that the OP actually under payed and doesn't realize it.

xtn
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But still, I'll bet a cool nickle that the OP actually under payed and doesn't realize it.

I think you'd lose that bet. My first question in my first post in this thread was Are you sure you didn't underpay by $0.38? to which the OP answered:

I just checked the previous statement, which includes this wording:

Your account has a credit balance of $0.38.
Please DO NOT SEND a payment for this amount.


AJ
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It is possible that the OP may have underpaid and the credit company wrote it off.

Based on my own experiences, two examples come to mind (although both were related to utility bills IIRC). One time I mistyped the payment amount and had a balance due of 20 cents or something like that. After realizing the mistake, I tried to make a subsequent payment of the 20 cents, but the system would not accept/process payments under $1. In that case, the customer service rep said to just let it ride over into the next billing cycle and that they would waive any late payment penalty.

In a second situation, was trying to close out an account and there ended up being a residual balance/difference of 16 cents (or whatever) due after the "final" payment was sent (per the estimate they provided to me to close the account). The provider subsequently sent a corrected statement with the "small balance" adjustment to zero it out.

In my experience, when I over pay on a credit card (which I do sometimes on purpose or it occurs as the result of rewards or credits posting after the statement date), the "credit" just gets applied to the new balance under the next billing cycle.

It is not clear whether the OP's Elan account is for a credit card. If so, then I would have expected the 38 cents difference, whether a minor overpayment/credit or underpayment to the account, would have carried over to the next statement cycle (as opposed to being adjusted/cancelled). Question then to the OP, did this occur with some other type of installment loan (i.e., non credit card) account, for which no additional activity was expected, and this was to close the account out?
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Your account has a credit balance of $0.38.
Please DO NOT SEND a payment for this amount.



You're assuming that the request to not send a payment implies that it is an amount the issuer owes the consumer? Why? There are other possible reasons, and they fit my theory just as well.

xtn
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You're assuming that the request to not send a payment implies that it is an amount the issuer owes the consumer?

Sorry, it says it's a credit balance. From working for credit card issuers for 20+ years, I know that your theory is not correct, and that credit card issuers call a balance owed to the consumer a 'credit balance'. If you don't believe me, here from https://www.consumerfinance.gov/ask-cfpb/there-is-a-credit-b...

There is a "credit balance" shown on my statement. What is a credit balance?
Answer:
A credit balance on your billing statement is an amount that the card issuer owes you.


and from https://www.legalmatch.com/law-library/article/credit-card-r...

What Is a Credit Balance?

A credit balance occurs when your account has a balance that is owed to you, rather than a balance you owe to the credit card company. This can occur when you return merchandise or pay more than you currently owe on your credit card.


Done with this topic.

AJ
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From working for credit card issuers for 20+ years, I know that your theory is not correct,

I'd rather listen to someone with experience than someone with theories.

PSU
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From working for credit card issuers for 20+ years, I know that your theory is not correct, and that credit card issuers call a balance owed to the consumer a 'credit balance'.


Okay. I've got to roll over to that.

DANGIT!

Hey AJ, I think this is the first time I've EVER thought there might be a chance you were wrong about something. That by itself should have been a big red flag for me to shut my trap.

xtn
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