> ## Documentation Index > Fetch the complete documentation index at: https://docs.budgetbandit.io/llms.txt > Use this file to discover all available pages before exploring further. # Refunds and credits > How refunds, returns, statement credits, and rewards behave on a credit card — and the difference between them. Money coming back onto a credit card is not all the same. A refund for something you bought behaves differently from a reward or statement credit, and Budget Bandit handles each correctly as long as you categorize it the way it actually happened. ## Refunds and returns A refund is the reverse of a purchase. Return $40 of groceries and the store credits the card $40. Categorize the refund to the **same category** you spent from — Groceries, in this case. Budget Bandit nets it against that month's spending in that category: * The category's Available rises back by the refund amount. * The amount reserved in the card's Payment category falls by the same amount, because there is now less funded spending to pay. In short, a refund unwinds the original move cleanly. The category gets its money back and the card's safe-to-pay number adjusts down to match. The key is matching the category. Categorize a grocery refund to Groceries, not to income — otherwise it looks like new money instead of a reversal, and your category spending will not net out. ## Rewards and statement credits A cash-back reward, sign-up bonus, or statement credit is different — it is not reversing a specific purchase, it is the card issuer reducing your balance. Categorize it to your income or Ready to Assign, or leave it uncategorized. It lowers the balance you owe **without** changing your Payment category's safe-to-pay number. Because the balance drops while the reserved cash stays put, you end up with more set aside than you owe — a surplus. When the card has a surplus, you have cash reserved that the card no longer needs. You can move that money back to Ready to Assign and give it a new job elsewhere in the budget. ## Quick reference | Money in | Categorize it as | Effect | | ----------------------------------------- | ------------------------------ | ---------------------------------------------------------------- | | **Refund / return** | The original spending category | Reverses the purchase; category and safe-to-pay both adjust back | | **Reward / cash back / statement credit** | Income or Ready to Assign | Lowers the balance owed; creates a surplus you can reassign | ## Related The model that makes refunds net cleanly. The flip side: unfunded spending. Put a refund in the right category. Record a payment as a transfer.