A negative balance on a credit card means your credit card company owes you money, rather than the other way around. In other words, you’ve paid more than your total balance due. Credit card companies generally prevent you from paying more than you owe, especially online. But if you pay by check, you might get around the policy. You’ll see the negative balance on your monthly statement as well as on the main page of your online account when you log in.
Normally, you’ll have a positive balance – meaning you owe money – during months you use your card. If you fully pay off such balances by the due date each month, you won’t be charged any interest. And as long as you pay at least the minimum amount required, your account will stay in good standing.
But if you’ve paid more than you owe, or if your statement credits exceed your charges, you’ll see a negative balance instead. The money a credit card issuer owes you could cover future purchases, or they could send you a check or make a deposit into your bank account. Different banks have different policies, but if you want a cash refund, you generally need to request one by phone or in writing. Otherwise, the issuer will only cut a check after several months of card inactivity.
So a negative balance certainly isn’t anything to worry about. But there are a few different ways to move forward, and knowing what your options are is always helpful.
Here’s what a negative balance on a credit card means:
- You’ll have a negative balance if your credit card issuer owes you money. It will be noted with a minus sign in front of the number listed for your current balance.
- You could see a negative balance if you accidentally overpaid your bill. You could also see one if you got a refund for a returned purchase.
- Some credit cards offer rewards in the form of statement credits. If you redeem for credits totaling more than you owe, you’ll have a negative balance.
- If you leave a negative balance on your account to cover future purchases, your next month’s balance will be reduced by that amount. For example, if you had a balance of -$50 and made $150 in purchases over the next billing cycle, your balance would only be $100.
- If you want a cash refund, you’ll have to call your bank’s customer service number. The customer service representative will tell you whether or not you need to submit your request in writing.
A negative balance on a credit card will also lower your credit utilization ratio. Using between 1% and 10% of your available credit is ideal. But negative utilization for one account certainly isn’t a bad thing.