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What does a negative credit card balance mean?

The balance on your credit card represents the amount you owe after using your card to make purchases. If you completely pay off your statement balance by the due date each month, your balance will be zero. If you carry a balance, you'll have to pay interest on that amount. So, what about a negative credit card balance? 

What is a negative credit card balance? 

A negative credit card balance is when your balance is below zero. It appears as a negative account balance. This means that your credit card company owes you money instead of the other way around. 

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. Let's say you bought a $25 dress. You returned the dress, and the $25 is credited back to your account that has a zero balance. Now, your account balance is - $25.

What to do about a negative balance on a credit card

If you notice you have a credit card with a negative balance, don't fret. You don't really have to do anything. But there are a few simple actions you can take if that will give you peace of mind:

  • Contact customer service: If you're not sure why you have a negative balance, contact your credit card issuer for an explanation. 
  • Request a deposit: Check with your credit card issuer to see if you can request the negative balance amount to be deposited to your bank account. You can also ask for a check, money order or cash.
  • Make a purchase: This is the easiest way to resolve a negative balance. Say you received a credit of $50, and your balance is now - $50. Once you spend $50, whether on one or multiple purchases, your balance will be zero. 

Reasons why you might have a negative credit card balance

A negative credit card balance can happen for several reasons, a few of the most common are listed below:

  • You got a refund: If you received a refund for a purchase but had already paid off your monthly balance, your balance will be negative 
  • You earned a statement credit: If you redeem credit card rewards for a statement credit, you could get a credit that exceeds your current balance. You may have paid off your balance in full without considering a potential credit. 
  • You overpaid your statement balance: If you accidentally overpay your statement balance, your balance will end up in the negative. 
  • You have a fraudulent charge removed after paying the disputed amount: This can happen if you pay off your balance. 
  • You have fees canceled: If you have interest charges, annual fees or late fees waived, but you already paid down that amount, you can wind up with a negative balance.

What happens if you have a negative balance? 

Ultimately, nothing really happens if you have a negative credit card balance. It doesn't hurt you. But still, you want to check in on your account regularly to make sure you don't wind up with a negative balance.

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