Negative balance in credit card? Here’s What That Means.

Have you ever checked your credit card balance and been surprised to see a negative balance in credit card? If so, you’re not alone. A negative credit card balance usually means the issuer owes you money, but there are a few other possible explanations.

In this blog post, we’ll discuss what can cause a negative balance on your credit card and whether or not it affects your credit score.

What is a negative balance in credit card?

Have you ever checked your credit card statement and ended up with a negative balance? This may seem like a dream come true, but it’s important to know exactly what it means.

A negative balance simply means that instead of owing money to the credit card company, they owe money to you. This can be caused by returns or refunds larger than the amount owed, or credits from other accounts being applied to the card.

Any future purchases will still be added to this negative balance, so it’s important to keep track and make sure you’re not spending more than you can pay off.

In some cases, the credit company may even issue a refund for the negative balance. So while seeing a negative balance may feel like winning the lottery, make sure to stay on top of your account and ensure it doesn’t spiral out of control.

Why is There a Negative Balance on My Credit Card?

Have you ever looked at your credit card statement and seen a negative balance? You might be wondering how that’s possible or what you need to do about it.

Don’t worry, Here are five common reasons for a negative balance on a credit card and what you can do about it.

1. You got a refund:

If you’ve received a refund for something you purchased with your credit card, the refunded amount will show up as a negative number on your statement. For example, if you purchased an item for $100 and then received a $20 refund, your statement would show a balance of -$20.

In this case, you don’t need to do anything; the negative balance will simply disappear when your next statement is generated.

2. You earned a statement credit:

Many credit cards offer rewards programs that give you points, cash back or other benefits for using your card. If you’ve earned enough rewards to cover your entire statement balance, the rewards will be applied as a statement credit and your balance will show up as zero or negative.

For example, if your statement balance is $100 and you have $120 in rewards credits, your new balance will be -$20. Again, in this case, you don’t need to do anything; the negative balance will automatically be carried over to your next statement.

3. You overpaid your statement balance:

If you’ve made additional payments on your account or paid off your entire balance early, you may see a negative balance on your next statement. This is because your credit card issuer will carry over any unused portion of your payment to the following months statement.

For example, if your statement balance is $100 and you make a payment of $150, your new balance will be -$50. In this case, the negative balance won’t affect future payments; it will simply be applied to next month’s bill.

4. You have a fraudulent charge removed after paying the disputed amount:

If you’ve been the victim of fraud and had to dispute a charge on your credit card, you may see a negative balance on your next statement. This is because the issuer will remove the fraudulent charge from your account and refund any money that you may have paid toward it.

For example, if someone charged $100 to your credit card without your permission and you paid $50 toward the charge before disputing it, you would see a negative balance of -$50 on your next statement.

In this case, the negative balance won’t affect future payments; it will simply be applied to next month’s bill.

5. You have fees canceled:

If you’ve had late fees or other charges reversed due to extenuating circumstances (like Covid-19), you may see a negative balance on your next statement. For example, if you had been charged a late fee of $25 but had the fee reversed due to Covid-19-related hardships, your new balance would be -$25./

Lastly, if none of these scenarios apply to YOU?

Your best bet would be to CALL YOUR CREDIT CARD COMPANY ASAP!

If you have a negative balance on your credit card statement, don’t worry! There are several perfectly normal reasons why this can happen. In most cases, the negative balance won’t affect future payments or accrued interest; it will simply be applied to next month’s bill.

However, if you’re unsure of why there’s a negative balance on your statement or what to do about it, we recommend Contacting your credit card issuer for more information.

Does Having a Negative Balance on a credit card Affect My Credit Score?

While a negative balance does not impact your credit score, maintaining low or 0% credit utilization is good for your credit health.

However, it’s important to note that having a negative balance does not increase your credit limit. So if you’re trying to improve your score by keeping low balances, it’s still important to stay within the limit set by your credit card issuer.

Overall, though, there’s no need to worry about a negative balance on your credit card statement it’s something to be proud of!

What to do When You Have a Negative Balance on Your Credit Card Statement

Here is your option when you have a negative balance on your credit card statement:

1. Do Nothing

In most cases, the negative balance won’t affect future payments or accrued interest; it will simply be applied to next month’s bill. So if you’re not sure what caused the negative balance or you don’t need the money right away, doing nothing is perfectly fine!

2. Contact Your Credit Card Issuer

If you’re unsure of why there’s a negative balance on your statement or what to do about it, we recommend contacting your credit card issuer for more information. They’ll be able to help you figure out the cause of the negative balance and advise you on the best way to move forward.

3. Request a Refund

If you have a negative balance because of fraudulent charges or other errors, you may be able to get a refund from your credit card issuer. In this case, it’s best to contact your issuer directly to discuss your options and begin the process.

Can you get a refund on a negative credit card balance if your account is closed?

Are you wondering what will happen to that negative balance on your closed credit card account? Good news – you can get a refund! Of course, this is only possible if the card issuer allows for refunds on negative balances.

So, the first step is to reach out to your credit card company and inquire about their policy. If they do offer refunds, they may have a specific process in place for requesting one.

It’s important to note that getting a refund may take some time, as the creditor would need to first deduct any remaining charges or fees associated with the account before issuing the refund.

However, it’s worth taking the steps to potentially get back some of that hard-earned money.

Is your credit limit higher when carrying a negative balance?

One common misconception about credit card limits is that carrying a negative balance means your limit has been raised. But that’s just not the case. Your credit limit stays the same, no matter what your current balance may be.

For instance, let’s say your credit limit is $5,000 and you have a negative balance of $100. You may think your new limit is now $5,100, but in reality, you still only have a credit limit of $5,000. Your negative balance allows you to charge up to that existing limit plus the negative amount – so in this case, you could charge up to $5,100 before hitting your limit and incurring over-the-limit fees.

Bottomline

A negative balance on your credit card may be a little confusing, but it’s not something to worry about. This occurs when the card issuer owes money to the cardholder and can happen for a variety of reasons. Luckily, there are a few ways to get rid of this balance.

So if you’re ever confused about what a negative balance means on your credit card statement, just leave me a comment and I’ll help clear things up!