Negative balance on a credit card: What it means
A negative credit card balance—also called a credit balance—means your card issuer owes you money equal to the negative dollar amount shown on your statement. It’s the opposite of a positive credit card balance, where you owe the credit card company money.
Negative balances can happen for a variety of reasons, like paying more than your current balance or having your account credited for a returned purchase or waived fee.
What you’ll learn:
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A negative balance on a credit card means your credit card company owes you money.
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If you have a negative balance on your credit card, you can either spend it by using your card or request the money back from your credit card issuer.
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Having a negative balance won’t increase your credit limit.
How a negative credit card balance can happen
Negative balances could happen for a few reasons, including:
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Overpaying your credit card bill: If you pay more than your current credit card balance.
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Getting a refund for a returned purchase: If you pay off your balance before getting a refund or if the refund is more than your current balance.
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Receiving statement credits: If you apply rewards in the form of a statement credit and the credit is more than your current credit card balance.
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Qualifying for waived fees: If your issuer charges a credit card fee that’s later waived. Issuers waive fees for a variety of reasons. For example, some issuers waive annual fees for military members on active duty.
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Having fraudulent or disputed charges reversed: If you’ve already paid down your balance and the issuer credits a fraudulent or disputed charge to your account.
What you can do about a negative credit card balance
If you want to do something about your negative balance, you may be able to:
Spend down the negative balance
Use your credit card like you normally do, and your credit card issuer should apply the account credit toward your purchases.
Request a refund
You might be able to ask your credit card issuer for a refund. The refund could come in the form of a bank account deposit, cash, a check or a money order. Capital One issues refunds by check.
Even if you don’t ask for a refund, your credit card issuer must try to issue one if you don’t make any other purchases for six months. Capital One automatically issues negative balance refunds after two billing cycles.
Negative credit card balance FAQ
Here’s additional information about having a negative credit card balance.
Is your credit limit higher when carrying a negative balance?
Carrying a negative credit balance doesn’t mean your card’s credit limit is higher, even though it may seem that way.
Say your credit limit is $5,000 and you have a negative balance of $100. That doesn’t mean your credit limit becomes $5,100. It just means that you can charge up to your existing credit limit plus the negative balance. Your credit limit is still $5,000. And your credit card company owes you $100.
How long does it take to receive a refund for overpayment on a credit card?
If you overpay your credit card by more than $1 and request a refund, your credit card company must send you a refund within seven business days of getting your written request.
Can I close my account with a negative balance?
If you have a negative balance when you close your credit card account, the issuer will typically refund the amount it owes you before closing the account.
Key takeaways: Can you have a negative balance on a credit card?
A negative credit card balance could mean that you overpaid your credit card bill. Or it could mean your credit card company has lowered your balance due to a refund, a charge reversal, a waived fee or a statement credit. You have options for your next steps: You can spend the extra money until you no longer have a negative balance, or you can request a refund.
If you’re looking for the right credit card, you can compare Capital One credit cards. You can even see if you’ll be approved for a credit card with 100% certainty and no impact to your credit scores.
