A credit memo is a favorable posting of a service to an account. The beneficiary can be a person or a company. A credit entry can be made, for example, by an incoming payment to a beneficiary’s current account. The corresponding amount is then credited to the account. A credit can also be made by reversing a payment transaction. Another possibility is the reversal of a direct debit, which can be reversed by the holder of the initially debited account and eventually credited back to his account.
Crediting after a credit card payment
When a purchase is reversed, the holder of the previously used credit card requests that the amount paid be credited. The same applies in the case of an unjustified charge. There are two different ways to obtain a credit. A credit note issued by the merchant himself is called a refund. In this case, a booking that has already been made is reversed without incurring high charges for the cardholder. If, however, the issuer is involved, a chargeback occurs. This procedure also takes only a few days, but fees of between 20 and 60 euros are charged.
The bank credit
A bank credit refers to all incoming payments. This type of credit includes both incoming transfers and amounts collected by direct debit. In the event of an incoming payment, the relevant bank is obliged under Section 675t of the German Civil Code to credit the amount to the account without delay. However, this shall only apply on business days. Public holidays and national holidays are excluded from this.
The settlement credit procedure
The so-called settlement credit note is a credit note used to settle a specific service. This type of credit note has the effect of an invoice, but is not issued by the service provider, but by the recipient of the service. Under certain conditions, input tax can also be deducted in the case of a settlement credit note.
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