5 Secrets to Eliminate Credit Card Debt Quickly

Your credit limit is typically set by the issuer when you apply for your credit card. Letting the negative balance cover future purchases might be convenient if you use the card regularly. This essentially gives you ‘free’ spending up to the negative balance amount. However, requesting a refund might be better if you don’t plan to use the card soon or need the cash for other purposes. Also, consider that leaving a large negative balance on your card means that money isn’t in your bank account where it could be earning interest.

When it comes to a credit card balance, a negative can really be a positive. A few conditions might cause a negative credit card balance, but it’s not a bad position to be in. Any time a negative dollar amount shows up on a credit card balance, it means the bank owes the account holder money.

1. That said, if you consistently pay your account balance on time and in full each month, you’ll build a positive payment history and avoid incurring interest charges.
2. The Truth in Lending Act, implemented by Regulation Z, offers protections to consumers who use credit.
3. For example, if you were to repay a $50 balance while waiting for a $50 refund to process, your balance would go down to -$50 once the pending transaction applies to your account.
4. For example, say you entered a specific payment amount that exceeded the amount due.

How a negative credit card balance can happen

It’s possible to get a refund of the late fee if your payment didn’t arrive on time. Another course of action you can take when you have a negative balance on a credit card is to use the credit for new purchases. As you make new charges on your account, your card issuer will deduct the amount you spend from your credit balance.

What Causes a Negative Credit Card Balance?

This could easily happen if you have autopay set up for a fixed amount on your credit card account. It could also happen if you pay off purchases before you receive your credit card bill. But negative balances are amounts that the card issuer owes to the cardholder—usually a positive thing for a consumer. A negative balance usually means the cardholder has received a refund for a purchase, a reversal for a fraudulent purchase, a credit card reward or a statement credit. Use up a negative balance by making purchases with the card or by requesting a refund from the card issuer. A negative credit card balance simply means your card issuer owes you money equal to the negative dollar amount shown on your statement.

Note that a credit card refund is different than a credit card chargeback, or billing dispute. You may also see a negative charge show up in your monthly billing statement. Refunded amounts negative balance on credit card will typically show as a negative charge (e.g. -$150) whereas regular purchases will show up as positive charges (e.g. $50). First, we provide paid placements to advertisers to present their offers. The payments we receive for those placements affects how and where advertisers’ offers appear on the site. This site does not include all companies or products available within the market.

Your Credit Card Fees Were Waived

In other words, a -$100 balance isn’t ‘better’ for your credit score than a $0 balance. You would have the ability to spend $16,000 on the card in the example above due to the credit balance on the account. When you discover fraudulent charges on your credit card account, you can file a credit card chargeback request. You can also file a chargeback when you disagree with a charge and you can’t work things out with the merchant.

That being said, the fact that your credit card balance is $0 might help your credit scores. If your credit reports show a $0 balance for every credit card, your credit utilization rate will be 0%. And 0% credit card utilization certainly could work in your favor. Many people received refunds in 2020 and 2021 when travel plans were canceled during the coronavirus pandemic. People purchased flights with their credit cards and paid off their credit card balances afterwards.

Plus, you’ll learn how a negative credit card balance can impact your credit scores and your credit limit, and consider which actions you might want to take in this situation. Daron, a negative balance on your credit card statement’s account summary is no occasion for concern. If it’s a card you use regularly, that credit will be applied to future purchases. Otherwise, you could contact the issuer and ask for a refund of the credit. Some credit card issuers will provide you with a credit balance refund automatically after a certain amount of time has passed. If you want the money sooner, though, you can request a refund directly.