A statement credit is money that a credit card issuer, like Discover or American Express, credits to your account. It's deducted from your card balance, but it won't count toward your minimum payment.
How does a statement credit work?
Statement credit is similar to cash back in that you earn a percentage from every purchase you make. However, statement credit doesn't get sent to your bank account, like cash back can. The money you earn can only be applied to your existing balance, reducing the amount of money you owe.
Can you spend statement credit?
If you have a cash-back or rewards credit card, you can redeem cash back, points or miles for a statement credit. This helps offset the cost of your bill. But you're still required to make the minimum payment. Credit cards offer statement credits for Global Entry or TSA PreCheck application fees.
What is redeem for statement credit?
A statement credit reduces your outstanding balance by the amount of your redemption, similar to a refund. For example, if you have a $100 balance and redeem your rewards for a statement credit of $5, your outstanding balance goes down to $95.