A negative number on a credit card statement balance means that your credit card company owes you money. Whether due to an overpayment, a returned item or a statement credit, a negative credit card balance signifies that your payments have exceeded the balance owed on your credit card account. This negative balance amount doesn't impact your credit score or credit report but keeping a credit card account paid down is always good for your personal finances.
How a Negative Credit Card Balance Happens
If you make regular payments to your credit card company to keep your outstanding balance low, you may find yourself with a negative balance on your credit card bill due to:
- a statement credit
- cash back rewards
- a reversal of late fees
- a refund for a fraudulent charge
- a purchase return credit
When you have autopay set up and make additional payments to keep your balance and interest charges low, doubling up on payments can cause an overpayment that results in a negative credit card balance.
In any case, when you see a negative balance, your credit card issuer owes you for a charge.
How to Get Your Money Back
A negative credit card balance is one of the few times when a below-zero balance is a good thing financially. But don't ignore that negative amount because it represents available credit for future purchases or money back in your pocket.
Once you've checked your credit card account online to confirm that all pending charges in the billing cycle have been processed and your total outstanding balance is negative, you can determine how to deal with your account credit.
The Consumer Financial Protection Bureau explains that the Truth in Lending Act protects consumers who use credit. The act's section regarding credit card balances states that lenders must make a good faith effort to return a consumer's overpayment by crediting the account or refunding the amount of the negative credit card balance.
Most credit card companies make this easy. American Express directs customers to initiate a refund request online. Chase and Capital One direct customers seeking a refund to call customer service or submit a written request.
The easiest resolution of a negative balance is to use up the available credit on new purchases.
How to Read a Credit Card Statement
You may see other negative numbers on your credit card statement representing payments made on your credit card account. Credit card companies generally list purchases as positive numbers and refunds as negative numbers.
This may seem counterintuitive since checking and savings accounts reflect financial activity the other way around: credits are positive, and debits are negative in most bank account statements. But if you think of your account balance as what you have built up in charges, the negative numbers represent what you have knocked off that outstanding balance, like a mortgage or other loan.
To pay off your total current balance, you'll need to make enough payments to offset all your charges. In other words, you need a negative number to match every positive number on your credit card statement.
When you have a positive balance on your credit card account, that is the amount that you still owe the credit card issuer and the amount on which you are being charged interest unless you have a zero-interest credit card.
Common Questions About Credit Card Balances
How Does a Credit Account Balance Impact a Credit Score?
It would be nice if a negative credit card balance looked good on your credit report, but according to Experian, the credit card issuer doesn't report a negative balance to the credit reporting agency because it doesn't factor into your credit history.
On the other hand, going over a credit card limit or hitting a high positive balance on a credit card can be bad things for your credit score. According to the Federal Reserve, carrying a balance close to your credit limit and the overall total of outstanding debt are among the top factors impacting your score. Keeping credit utilization and total debt low and paying your bills on time are positive moves for your score.
Does a Negative Balance Increase Your Credit Limit?
Overpaying or carrying a negative credit card balance does not increase your account's credit limit. Maintaining an account in good standing with a lender is the key to qualifying for a credit limit increase. For instance, Capital One recommends that cardholders make on-time payments, pay down balances and follow other good credit-related habits to positively influence credit reporting.
Can You Make a Balance Transfer From a Negative Balance Credit Card?
If you have more than one account with a credit card company, you may be able to move a negative balance over to an account with a positive balance. Call your credit card issuer to learn its policy on balance transfers between existing credit card accounts.
- Chase: What Happens if I Overpay My Credit Card?
- Consumer Financial Protection Bureau: 12 CFR Part 1026 - Truth in Lending (Regulation Z)
- American Express: How Do I Request a Refund of a Credit Balance?
- Capital One: Can You Have a Negative Balance on a Credit Card?
- Experian: Can You Have a Negative Balance on a Credit Card?
- Federal Reserve: Credit Reports and Credit Scores
- Capital One: FAQ for a Credit Line Increase
This article was written by PocketSense staff. If you have any questions, please reach out to us on our contact us page.