Why Do I Have a Negative Credit Card Balance?

If the statement credit amount exceeds your account balance, you could have a negative balance as a result. If you regularly overpay your credit card to make room for increased spending, you may want to consider contacting your provider and requesting a credit limit increase. Making a purchase in excess of what your card provider owes you will eliminate the negative balance. If you have a negative balance on your credit card account, the simplest way to bring your balance back to $0 is to make new purchases. Sometimes, a refund you receive for a returned purchase could go through after you’ve already repaid your credit card balance.

While you don’t have to worry about a negative card balance hurting your credit score, a few actions could bring it back to zero. Read on to learn how to respond if you notice your credit card balance falling into the negatives. Credit card statement balances show the total dollar amount you owe your credit card company at the end of your monthly billing cycle. All of your purchases, cash advances negative balance on credit card and balance transfers make up your statement balance.

But in order to receive the refund, you’ll need to have a current address or phone number on your account. If the card issuer can’t find current information, they aren’t required to take any further action. Negative account balances can occur for several reasons, but regardless of the cause, a balance below zero isn’t a bad thing. In fact, it means you have a credit on your account, so future purchases up to that amount won’t cost you additional money. If you’d rather have the money back now, you can contact your card company and ask for a refund. To learn more about the ins and outs of credit card payments, check out our payment FAQs.

1. “Overpaying does not mean you have a higher credit limit,” says Ashley Tufts-Freimuth, vice president of corporate affairs and communications at American Express.
2. But still, you want to check in on your account regularly to make sure you don’t wind up with a negative balance.
3. Learn how you can increase your credit limit and boost your credit score.
4. 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.
5. If your credit card balance is zero at the time of your refund, your balance will be -$75.

You overpaid your credit card bill

Negative credit card balances usually aren’t reasons for concern. You could overpay your bill, earn a statement credit, or receive a refund. If you’re wondering why you have a negative balance, consider the following reasons.

And if you pay more than your current balance, you’ll end up with a negative balance. A negative credit balance doesn’t have a direct impact on your credit score. However, it shows that you have a low credit utilization ratio, which refers to your credit usage compared to your overall available credit. Your credit utilization ratio plays a significant role in determining your credit score. If your credit balance reaches the negatives, that also means your account is likely in good standing without credit card debt.

Can I overpay with automatic payments?

1. The offers and/or promotions mentioned above may have changed, expired, or are no longer available.
2. Our suite of security features can help you protect your info, money and give you peace of mind.
3. Bank deposit accounts, such as checking and savings, may be subject to approval.
4. Open a savings account or open a Certificate of Deposit (see interest rates) and start saving your money.
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For instance, no one wants a negative balance on their bank account. However, the reasons for a negative credit card balance are actually mostly positive. That said, if you consistently pay your account balance on time and in full each month, you’ll build a positive payment history and avoid incurring interest charges. In addition, if you charge less than 30% of your credit limit, you’ll keep your credit utilization ratio low.

Statement credit from your credit card issuer

For example, Capital One’s Quicksilver card offers a one-time $200 cash bonus to new cardholders who spend $500 on purchases within the first three months of opening the card. Depending on where your balance currently stands, you could end up with a negative balance as a result of that additional $200. 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. 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.

Make purchases with your debit card, and bank from almost anywhere by phone, tablet or computer and more than 15,000 ATMs and more than 4,700 branches. Below, CNBC Select reviews how a negative balance occurs, its effect on your credit score and credit limit and how to bring your balance back to zero. Our suite of security features can help you protect your info, money and give you peace of mind. See how we’re dedicated to helping protect you, your accounts and your loved ones from financial abuse.

The creditor isn’t required to take any additional action if it doesn’t know your current location and can’t trace your location through your last-known address or telephone number. Open a savings account or open a Certificate of Deposit (see interest rates) and start saving your money.

Different ways to overpay a credit card

Your automatic payment won’t cause you to overpay as long as you set it to pay your full balance. In addition, if you manually pay your full balance before the automatic payment takes place, the automatic payment shouldn’t take place. The payment system should recognize that you don’t have a balance, so there will be nothing to pay. On the blog of DM Financial Literacy, there is a post titled “5 Things to Do If You Have a Negative Credit Card Balance” that offers helpful guidance. Best Kids Debit Card The article helps users reclaim control of their money by outlining crucial methods to fix the problem and raise credit ratings.

Your credit card issuer may apply statement credits to your account as you claim certain rewards, like cash back. Your reward could exceed your balance and send your credit card balance into the negatives. That overpayment will subtract from your new charges, resulting in a lower statement balance. You may be able to intentionally overpay your credit card ahead of a big purchase if you need some additional room on your card, depending on your card provider. An overpaid credit card will temporarily expand your credit limit, which may help you avoid an overlimit fee — a fee card providers charge for exceeding your credit limit.

However, overpayment in itself may not do anything to help build your credit. Technically, yes — a negative balance will increase your credit limit. As soon as the negative balance is cleared, your available credit will fall back to its previous limit. Just like when you initiate a credit card refund, reversing a fraudulent charge on your credit card may bring your balance into the negative. Cash back credit cards are incredibly popular, with rewards from 1% to 8% cash back. A credit card balance is the total amount of credit that you’ve used on your card.

Choose from business checking, business credit cards, merchant services or visit our business resource center. As for your options, you may consider either using the statement credit on an upcoming purchase or requesting a refund from your card issuer. It’s probably worth reaching out to your credit card issuer for more insight if you’re confused about how the negative balance got there in the first place.