5 Things to Do if You Have a Negative Credit Card Balance Leave a comment

For personal advice regarding your financial situation, please consult with a financial advisor. You likely know the consequences of not paying your full balance. At best, you may owe some interest; at worst, paying less than the minimum may lead to fees and negatively affect your credit score. The Capital One Venture Rewards Credit Card is the best rewards credit card overall because it offers a valuable sign-up bonus and generous rewards rate. Explore how to choose a debt reduction approach to help pay off your credit card debt. Learn how you can increase your credit limit and boost your credit score.

What does a negative balance on my credit card account mean?

The reason a negative card balance is mostly positive is that your negative balance probably means you overpaid for something at some point. That might mean paying for a purchase that requires a refund or paying off a balance before a statement credit is issued. The negative balance is, thankfully, a sign that your money is being returned to you.

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If you have a small negative balance on your card, it may make sense to just let it roll over to the next month’s statement. This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product. When you make a purchase on your credit card, your balance owing goes up and shows up as a positive balance on your statement.

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These steps can help improve your credit profile and increase your credit score over time. Overpaying your credit card won’t add to your credit score or your credit limit. If a credit card fee is charged to your account and later waived, it could possibly result in a negative balance. For example, credit card companies may sometimes waive yearly fees for military members on active duty. If you overpay your credit card bill, your card issuer may apply the extra funds to your account.

If anything, you can rest assured knowing that you don’t owe money to the credit card company. However, it won’t help boost your credit score or increase your credit limit. Card issuers are required under the Truth in Lending Act to refund credit balances over $1 within seven business days after receiving your written request. If you see a negative balance on your credit card account, your first thought could be that something’s wrong.

Anytime money is credited back to your account in this way, it will show up with a minus symbol in front of the dollar amount. While seeing a negative amount on your credit card statement may feel jarring, a negative credit card balance is rarely anything to worry about. On the contrary, it could signal a low credit utilization ratio. If you’re concerned that the negative number may be inaccurate, contact your financial institutions customer service department for clarification. Otherwise, you can request a cash refund or just keep using your card like usual.

It’s the opposite of a positive credit card balance, where you owe your credit card company money. It may not be good or bad, but you just reduced your checking or savings balance by paying your credit card company more money than you needed to. The main indicator on your credit card will be a negative balance.

In most of these situations, you have options for how to handle the resulting negative balance. Greg Johnson, co-founder of Club Thrifty, explains that there are instances when you may be issued a statement credit, such as rewards card redemptions. You may also be able to transfer the excess balance to another credit card from the same issuer. If that determination has not been made, it should be charged off by day 60 after the overdraft, regardless.

1. When you make a purchase on your credit card, your balance owing goes up and shows up as a positive balance on your statement.
2. Sometimes, a refund you receive for a returned purchase could go through after you’ve already repaid your credit card balance.
3. Whether you’ve returned a purchase or gone through the process of disputing a charge, a negative balance is a sign that your funds were returned.
4. Your credit card company might also accept requests in person or over the phone.
5. If you have a zero balance, they will give your credit limit a temporary increase.

For instance, if you have a -$50 balance, you can simply apply it to future purchases. Once you make $50 in purchases, your balance will return to $0, or it could reduce your next bill by $50. Whether you choose to work with a financial advisor and develop a financial strategy or invest online, J.P. Morgan offers investment education, expertise and a range of tools to help you reach your goals. Morgan Wealth Management Branch or check out our latest online investing offers, promotions, and coupons. Indeed, refunds are the most common reason for a negative balance.

A negative balance on your credit card means that your card provider owes you money. While uncommon — and potentially alarming on first encounter — a negative credit card balance can be easily resolved. Two common methods include making a purchase to utilize the owed credit or requesting a deposit of funds to your bank account. Another reason for a negative balance is if you earn a statement credit after you’ve paid your balance. Cash back rewards cards often offer cash back in the form of a statement credit. If the statement credit is larger than the amount of your balance when it’s issued, you will see a negative credit card balance.

And even if you don’t ask for a refund, your credit card negative balance on credit card company must try to issue one if you don’t make any other purchases for more than six months. Your statement balance shows the amount you owe or the status of your account at the end of each billing cycle. A negative statement balance applies to the previous billing period. Before you take any action to address your negative balance, you may want to confirm that you’re looking at your current balance. “Should you make a payment toward your balance, then claim a statement credit, you could end up with a negative balance,” he says. A negative balance on your credit card is potentially a sign that you’ve overpaid what you owe.

1. It just means that you can charge up to your existing credit limit plus the negative balance.
2. You don’t have to repay a negative balance—it represents money that your credit card company owes you.
3. Just keep in mind that you have a sort of short-term credit for whatever the negative balance amount happens to be.
4. Cash back rewards cards often offer cash back in the form of a statement credit.
5. Discover Bank does not provide the products and services on the website.
6. At best, you may owe some interest; at worst, paying less than the minimum may lead to fees and negatively affect your credit score.

Some credit card payment portals prevent payments from exceeding your total balance. However, you may still overpay if you have autopayments set up but accidentally pay manually as well. Cardmembers who use checks or other manual payment methods may also accidentally exceed their outstanding balance. Many credit card companies allow you to check your real-time credit card balance online or through a mobile app.

Typically, this happens when you’ve overpaid your outstanding balance or if you’ve had a credit returned to your account. A common example is if you make a purchase with the card and later return the item, where you then are issued a credit back to your account. You returned the dress, and the $25 is credited back to your account that has a zero balance.