What To Do If You Overpaid Your Credit Card
Another option, if you don’t use your card often, is to let the negative balance roll over to your next statement. That overpayment will subtract from your new charges, resulting in a lower statement balance. Some credit card issuers will let you redeem your cash back rewards as a statement credit.
- However, paying down a previously high balance may give your credit score a boost.
- You might know that carrying a balance on your credit card affects your credit utilization ratio — or how much of your credit line you’re using.
- 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.
- If your negative balance is $50, for instance, and you get a haircut that costs $52, you will be responsible for only $2, with the $50 credit balance taking care of the rest of the bill.
- If you have other accounts with the card issuer, you will still have access to your online account and can request a refund through your online portal.
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. Usually, when you see your credit card statement, you’ll see a number like $250. This can happen for several reasons, but it indicates your account has a credit — which means that your credit card company owes you money. Some credit card issuers make it easy to see if you’ve recently made a payment. If you have a card such as the Chase Sapphire Preferred® Card, tracking your payments should be simple. While Chase typically doesn’t update your current balance right away, it displays the most recently schedule payment in the card details when you check the app.
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Some credit cards provide cardholders with bonus rewards or statement credits based on select purchases. If the cardholder pays off the balance each month, a reward or statement credit applied later may show up as a negative balance on a later statement. It is money owed to you for various reasons and can help offset future spending on your credit card. It’s normally pretty painless to use up a negative balance — unless you are dealing with a closed account.
You can also tap “View payment activity” under the card details to see all your recent payments and whether they have gone through. This is one of those times that a negative could be a good thing. A negative balance on your credit card statement means that the issuer actually owes you money. For example, let’s say you have a credit card with a $1,000 credit limit and a negative balance of $50. However, your credit limit will drop back to $1,000 once you clear the negative balance by making a purchase or receiving a credit balance refund.
Just use your credit card like you normally do, and your credit card company will apply the account credit toward your purchases. It’s possible to have a negative balance—also known as a credit balance—on a credit card. It just means https://1investing.in/ that instead of owing money to your credit card company, your credit card company actually owes you. The credit card offers that appear on the website are from credit card companies from which ThePointsGuy.com receives compensation.
How Can You Get a Negative Balance on Your Credit Card?
In most cases, you should be able to dispute these charges before having to pay for them. This website is using a security service to protect itself from online attacks. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. Accuracy, independence and authority remain as key principles of our editorial guidelines.
You will temporarily be allowed to spend more on your card, but your credit limit will not change. Perhaps the easiest way to avoid overpayment is to “set it and forget it” by signing up for autopay. With this feature, payments will be made automatically and you can opt to pay the entire balance each month.
You Get a Chargeback for Fraudulent Purchases
Before you log out of the app in a panic, know that a negative balance on your credit card is a good thing, even though it can look and sound scary. Think of it as the digital equivalent of finding extra cash you’d forgotten about in your coat pocket. Power its potential with one of our business credit cards, like Ink Business Preferred℠, Ink Business Unlimited℠ or Ink Business Cash℠. Enjoy the convenience of earning cash back with Chase Freedom® or Chase Freedom Unlimited®. For example, let’s say your credit limit is $5,000 and you have a negative balance of $100. It just means that you can charge up to your existing credit limit plus the negative balance.
Just Keep Spending With the Card
With this approach, there is almost never a need to contact the bank or do anything out of the ordinary. 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. Cards such as the Chase Slate Edge provide introductory APR offers and 0% APR offers occasionally. So, if you have a card you aren’t using, it may be better to log in to your online account and check for any offers before applying for a new credit card. Your credit limit will not change based on how much you pay on your credit balance.
If you choose to have a check mailed, the post office will take several additional days to get it to you. Perhaps you bought an item with a credit card and then did the wise thing by paying off the balance quickly. However, you soon learned the product you purchased wasn’t what you needed or was broken, so you returned it. Since you already paid off the balance, that refund will create a negative statement balance after it is processed to your credit card.
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. If your account has a credit over $1, you can write to your credit card issuer—typically at the address listed on your credit card statement—to request a refund. Include details on how you’d like the payment to be refunded, for example, via cash, check, or deposited into an account. Then, your card issuer will have seven days to send you a refund after receiving your request.
According to the Truth in Lending Act, card issuers must refund any negative balance over $1 within a reasonable timeframe. However, manually requesting a refund through your online account or by calling the number on the back of your phone will speed up the process. 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.
For example, if you have a $100 credit balance, you could charge a $110 grocery expense with your card to utilize the credit. This would then bring your account up to a positive $10, which you’d need to repay before the end of your billing cycle to avoid interest. For example, if you have a $5,000 credit limit but a credit balance of $100, you can spend up to $5,100.
Award vs. cash calculator
If you see a negative balance on your credit card account, your first thought could be that something’s wrong. But a negative balance simply means that your card issuer owes you money, which may seem odd since it’s usually the other way around. A negative credit card balance is a good thing because it means the bank owes you money. When you find yourself with a negative balance, choose the option that works best for you to use that money and maximize your rewards.
You’ll most often have a negative credit card balance after you’ve made a return or received a refund for something. The majority of issuers will approve new credit cards to those with fair to excellent credit, and issuers such as Chase or Discover may have 0% APR offers available. However, they tend to be reserved for those with at least good credit scores of over 670. Bad credit is considered a FICO score lower than 630 and is a key barrier to those looking to balance transfer or consolidate credit card debt. The purpose of a balance transfer is to have a reduced or 0% interest rate, which can help borrowers save on interest and pay off debt quickly. Once the issuer processes your request, the credit will be wired or sent via check (depending on the bank).
Many credit card companies allow you to check your real-time credit card balance online or through a mobile app. On the other hand, 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, you may want to confirm that you’re looking at your current balance.
What is a negative credit card balance?
If you pay only the minimums, it would take you 34.9 years (or 419 total payments) to repay the remaining balance due. During that time period, you would end up paying $11,239 in interest. It’s worth calling your credit card issuer to see if your APR can be lowered. Although not a guarantee, some issuers may lower your APR, which can help you save greatly on monthly interest charges. Another alternative to balance transfer is a debt consolidation loan.