What Does a Negative Balance on a Credit Card Mean?

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. You returned the dress, and the $25 is credited back to your account that has a zero balance. For example, if you have a $1,000 credit limit and a $100 negative balance, credit scoring models see this as 0% utilization, not -10%.

What do you do with a negative balance on a closed credit card account?

A negative account balance is the exact opposite of credit card debt. With credit card debt, you owe money to the credit card lender. Sometimes, a refund you receive for a returned purchase could go through after you’ve already repaid your credit card balance.

It also boasts low credit score and low down payment requirements for some of its mortgages. Expressed as a percentage, a mortgage interest rate is the cost of borrowing money. It can vary based on several factors, such as your credit score, debt-to-income ratio (DTI), down payment, loan amount, and repayment term.

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Recently, I experienced this when I made a return before paying the balance on my Citi® / AAdvantage® Platinum Select® World Elite Mastercard® (see rates and fees). However, the return didn’t process until after I had paid my bill. Although rare, merchant errors that are fixed can cause a negative credit card balance. This happens when the correction occurs after you’ve paid off the balance. If you’re checking your credit card statement and see a negative balance, you may be thinking, “Did I do something wrong? A negative balance on your credit card isn’t a cause for panic — it’s actually good news.

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You can make purchases on your credit card as you normally would. Just keep in mind that you have a sort of short-term credit for whatever the negative balance amount happens to be. For example, if you have a negative balance of $100, you won’t add to your new balance until you’ve spent more than $100. You don’t have to spend a negative balance immediately or all at once.

Any opinions expressed are those of LendingTree alone and have not been reviewed, approved, or otherwise endorsed by any issuer. The offers and/or promotions mentioned above may have changed, expired, or journal entries to issue stock are no longer available. You may also be able to transfer the excess balance to another credit card from the same issuer. Our partners cannot pay us to guarantee favorable reviews of their products or services. Aside from the cash back offerings, Blue Cash Everyday offers additional perks such as shopping credits and protections, travel insurance, payment flexibility, and more. You can’t control inflation, but one way to counter rising costs is to earn cash back on necessary purchases.

1. Her previous work experience includes various editorial positions at FinanceBuzz.
2. With a practical suite of rewards categories, there’s a reason the Blue Cash Everyday is always in the conversation about the best cash back credit cards.
3. Instead of spending more on his Platinum Card, he used the American Express chat feature to ask an agent to transfer the negative balance and put it toward the Delta balance.
4. The Blue Cash Everyday® Card from American Express is an aptly named card that rewards you for some of the most common everyday purchases.

Credit card statement balances represent how much a cardholder owes to a credit card company. Purchases, cash advances and balance transfers add up to a monthly statement balance. four tax scams to watch out for this tax season In some situations, a cardholder may find a negative balance, meaning the credit card company owes money to the cardholder.

However, to maximize your rewards, be aware of the exclusions. Enrollment may be required for select American Express benefits and offers. Closing costs are the fees you, as the buyer, need to pay before getting a loan. Common fees include attorney fees, home appraisal fees, origination fees, and application fees.

Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. Borrowers can also get pre-approved in just minutes and close on a loan in three weeks, which is faster than the industry average.

After that spending limit is met, purchases in this category earn 1% cash back. Some lenders have higher average mortgage rates than others, regardless of your credit or financial situation. Homefinity offers a wide variety of mortgage products in nearly all 50 states.

In addition, if you charge less than 30% of your credit limit, you’ll keep your credit utilization ratio low. These steps can help improve your credit profile and increase your credit score over time. If you don’t request a refund or use your card, the card issuer will typically send you the amount within six months. But leaving money with your credit issuer means it’s not in your hands. If you’d rather use it, here are your options for dealing with a negative credit card balance. When there’s no balance on the card, and you receive a statement credit from rewards you’ve redeemed, cash back, or a sign-up bonus, you may see a negative credit card balance.

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While seeing a negative amount on your credit card statement may feel jarring, a negative credit card balance is rarely anything to worry about. On the contrary, it could signal a low credit utilization ratio. If you’re concerned that the negative number may be inaccurate, contact your financial institutions customer service department for clarification. Otherwise, you can request a cash refund or just keep using your card like usual. Negative credit card balances act as a kind of temporary credit on your account. If you have a zero balance, they will give your credit limit a temporary increase.

According to the Truth in Lending Act, card issuers must refund any negative balance over $1 within a reasonable timeframe. However, manually requesting a refund through your online account or by calling the number on the back of your phone will speed up the process. The easiest way to bring a negative balance to $0 is to continue making purchases using the credit card. Even if the balance turns into a positive $50 from -$300, the cardholder can make another payment to pay off the positive balance.