And that statement credit could result in a negative balance if it’s more than your current credit card balance. 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. The reason a negative card balance is mostly positive is that your negative balance probably means you overpaid for something at some point.
Before delving into the implications of a negative statement balance, it’s essential to grasp the concept of a statement balance. The statement balance, often found on bank statements, credit card statements, and other financial documents, represents the total amount owed or available in an account at a specific point in time. 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.
Most credit models consider negative balances equivalent to a $0 balance, which means negative balances don’t hurt credit scores. You may also see a negative charge show up in your monthly billing statement. Refunded amounts will forms and instructions typically show as a negative charge (e.g. -$150) whereas regular purchases will show up as positive charges (e.g. $50). If an autopay feature pays your bill off before a manual payment is processed a negative balance can also result.
Does having a negative balance impact credit scores?
- Bank deposit accounts, such as checking and savings, may be subject to approval.
- Outstanding balances represent what the cardholder owes to the card issuer.
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- A negative credit card balance is when your balance is below zero.
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Let’s face it — there’s a lot of jargon and high-level talk in the credit card industry. Our experts have learned the ins and outs of credit card applications and policies so you don’t have to. With tools like CardMatch™ and in-depth advice from our editors, we present you with digestible information so you can make informed financial decisions. Any future purchases made will be added to any negative balance. We are an independent, advertising-supported comparison service. You are leaving Discover.com and entering a website operated by a third party.
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The information, including card rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the bank’s website for the most current information. If you don’t use this card much, you could proactively contact the card’s customer service and ask for a refund of the money. If you are not sure what occasioned the negative balance, you could ask the issuer for an explanation. Check out the Chase Auto Education Center to get car guidance from a trusted source.
A fraudulent charge was reversed
If the statement credit amount exceeds your account balance, you could have a negative balance as a result. Many credit card companies allow you to check your real-time credit card balance online or through a mobile app. Discover offers online and mobile banking, which could help you confirm whether you have a negative balance. By embracing these principles, we can forge a path toward financial well-being and secure a stable foundation for future prosperity. A negative statement balance can be perplexing and concerning, but understanding the underlying reasons is essential for addressing this financial anomaly. Several creating reports overview 2020 factors can contribute to a negative statement balance, and identifying the specific cause is instrumental in rectifying the situation.
Making a purchase in excess of what your card provider owes you will eliminate the negative balance. If you are confused or in doubt about the nature of your negative balance, you may want to contact your card provider. Your provider can verify that your credit card statement is correct and answer any questions you have. If you notice your credit card balance has dipped below zero, don’t panic. A negative balance on a credit card is typically the result of an overpaid bill and is easily rectified.
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. 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. In some situations, a cardholder may find a negative balance, meaning the credit card company owes money to the cardholder.
A statement balance is an amount the cardholder owes from the purchases, cash advances or balance transfers made within the last monthly billing cycle. Current balances show how much the cardholder owes in total, to date. Card payments typically take a few business days to process, so online current balances may not change immediately after payment. A negative balance will usually sit in an account for at least 60 to 90 days before the bank may decide to refund the money via check or cash deposit into a linked account. Because the card issuer owes the cardholder, there won’t be a monthly payment required or danger of accruing interest. The cardholder can use the time to figure out whether they want to continue using the card to make purchases or close the account and request the money back as a refund.
It could be that you returned a purchase and then were given credit for it. If you had already paid for that purchase, you will then have a credit balance. For example, a negative balance could potentially affect your credit utilization—a measure of how much of your available credit you’re using. Experts recommend using no more than 30% of your available credit. And if you have a negative balance, your credit utilization for that card would be less than 30%—which could be good for your credit scores.
Negative Balance On A Credit Card: What To Do?
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. Some credit cards provide cardholders with bonus rewards or statement credits based on select purchases. If the cardholder pays off the balance each month, a reward or statement credit applied later may show up as a negative balance on a later statement.
And if you pay more than your current balance, you’ll end up with a negative balance. Outstanding balances represent what the cardholder owes to the card issuer. A negative balance, on the other hand, represents what the card issuer owes to the cardholder. If you are closing a credit card account with a negative balance, the issuer will most likely refund the money before officially closing the account. There are a handful of scenarios where it may not be that simple, however.
This compensation may impact how and where products appear on this site, including, for example, the order in which they appear within listing categories. Other factors, such as our proprietary website’s rules and the likelihood of applicants’ credit approval also impact how and where products appear on the site. The Truth in Lending Act lays out how lenders should handle this situation. And it requires that they make a good faith effort to refund the money. Just use your credit card like you normally do, and your credit card company will apply the account credit toward your purchases. It’s possible to have a negative balance—also known as a credit balance—on a credit card.
