Toni is a points and miles enthusiast who has been leveraging loyalty programs to travel around the world (for nearly free) with her husband and their four young children. She’s passionate about sharing travel tips so that others can not only feel inspired but also confident in planning their own travel.
What you can do about a negative credit card balance
If you overpay a credit card, you may be left with a credit balance. No need to worry though — this negative balance is money that is owed to you. You can either use it to offset future spending or request to have the money refunded to you.
Even though you may see a negative balance on your credit card account, this won’t be reflected in your credit reports. When you check your credit report with the top 3 credit bureaus, the balance will simply show $0. Since credit scoring methods, such as FICO, only use the information found on your credit report, your negative credit balance won’t necessarily help you.
Sometimes, a refund you receive for a returned purchase could go through after you’ve already repaid your credit card balance. For example, if you were to repay a $50 balance while waiting for a $50 refund to process, your balance would go down to -$50 once the pending transaction applies to your account. If you’re chipping away at your credit card balance with multiple payments, you might accidentally pay your credit card company more than you mean to. You might even accidentally add an extra digit or hit the wrong button when making a payment.
While you may be able to exceed your credit limit when you have a negative balance, it doesn’t increase your overall credit limit. You don’t have to repay a negative balance—it represents money that your credit card company owes you. When you have a negative credit card balance, you can see it on your statement or your online account portal. But if you check your credit report from Equifax®, TransUnion®, or Experian™, you won’t find a negative balance listed there. When your credit card issuer receives your dispute it will start an investigation. If your credit card company agrees that the charge was fraudulent or erroneous, it will credit the amount back to your account.
If not, you must call the number on the back of your credit card or visit a local branch. Maybe you don’t want to use this credit card anymore or plan to close your account. In this case, you can request back money from your credit card’s issuer. You can typically do this via secured message, calling your card’s customer service line, or even heading into a branch. Let’s say your card’s balance was $100, but you sent a check for $125.
You filed a credit card chargeback
After having “non-rev” privileges with Southwest Airlines, Christy dove into the world of points and miles so she could continue traveling for free. It could mean that you have some extra wiggle room when it comes to how much you can spend on your card. “That’s one reason it’s so important to understand the contract you have with each of your creditors,” she says. You may also be able to visit a branch location (if available) and request a refund in person. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
- Some credit card payment portals prevent payments from exceeding your total balance.
- You may have paid off your credit card and discovered some unauthorized charges.
- So, if you have a limit of $5,000 and receive a statement credit for $170, your credit limit will temporarily be $5,170.
- Discovering a negative balance on your credit card statement or online account might make you feel worried or anxious.
- That being said, the fact that your credit card balance is $0 might help your credit scores.
A merchant issued a refund
Outstanding balances represent what the cardholder owes to the card issuer. A negative balance, on the other hand, represents what the card issuer owes to the cardholder. If a large negative balance exists—say, $1,000 or more—the cardholder can request a refund from the credit card company via check or direct deposit. Though it often makes more sense for larger balances, having a larger negative balance is not required to request a refund. Many of the credit card offers that appear on this site are from credit card companies from which we receive financial compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear).
Here’s what to do if you have a negative balance on your credit cards
Please view our advertising policy and product review methodology for more information. If negative balance on credit card you have a negative credit card balance, you don’t have to actually do anything. You can make purchases on your credit card as you normally would. Just keep in mind that you have a sort of short-term credit for whatever the negative balance amount happens to be. For example, if you have a negative balance of $100, you won’t add to your new balance until you’ve spent more than $100.
It’s in a cardholder’s best interest to use any negative balance on a credit card statement. It may not be the same as cash in hand, but it does have value. Once the negative balance has been used up, the cardholder may continue to make purchases or close the account if desired. Most commonly, a store has an extended return window but may only allow returns to be processed to the original form of payment. If you’ve closed your credit card account and later received a credit, there is no need to worry.
How Does a Negative Credit Card Balance Impact Your Credit Limit?
The credit balance will offset your spending, and you can use up your credit. For example, if you have a $75 credit balance and you use your credit card to go grocery shopping and spend $100, your new credit card balance will reflect the net balance of $25. Tufts singles out overpayments, but the same logic should apply if your negative balance resulted from a refund or a statement credit as well. If you overpay your credit card by more than $1 and request a refund, your credit card company must send you a refund within seven business days of getting your written request. It’s important to exercise caution when you close any credit card account. Closing a credit card has the potential to hurt your credit scores.
Recently, I experienced this when I made a return before paying the balance on my Citi® / AAdvantage® Platinum Select® World Elite Mastercard® (see rates and fees). However, the return didn’t process until after I had paid my bill. If you’ve already paid off your bill and then end up canceling something (like a prepaid hotel stay), it will be credited to you by the merchant and returned to your account. You can do a few things with a negative credit card balance, but if you want a refund, know that policies may vary from issuer to issuer. On the other hand, you could request the credited amount be disbursed to you in some form other than a statement credit. Other options available to you may include cash, check, money order or credit deposit.
This would lead to a negative credit balance of $25 on your credit card. We may be compensated when you click on product links, such as credit cards, from one or more of our advertising partners. See our Advertising Policy for more about our partners, how we make money, and our rating methodology. When you have a negative balance on your credit card account, you have a couple of options.
The easiest way to bring a negative balance to $0 is to continue making purchases using the credit card. Even if the balance turns into a positive $50 from -$300, the cardholder can make another payment to pay off the positive balance. If an autopay feature pays your bill off before a manual payment is processed a negative balance can also result. Paper check payments plus any type of online payment made in the same billing cycle could also result in a negative balance.
If you have a rewards credit card, you might earn rewards in the form of a statement credit that’s applied to your balance. And that statement credit could result in a negative balance if it’s more than your current credit card balance. It’s possible to have a negative balance—also known as a credit balance—on a credit card. It just means that instead of owing money to your credit card company, your credit card company actually owes you.