Negative Balance On Credit Card 

Negative Balance On Credit Card

A credit card account with a negative balance does not always signal that your available credit has been restricted or that you have done something illegal. A credit card account with a negative balance could simply signify that your card provider owes you money. Read on to understand what a Negative Balance On Credit Card means.

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Essentially, you are in a scenario where you have paid more on your credit card than you owe. Your card balance will be displayed as a negative figure if this occurs. 

There are several reasons why you may have a credit card balance that is negative. 

A credit card account might have a negative balance (also known as a credit balance) for a variety of reasons. 

The following are the most common: 

* You returned the item and received a refund: You may request a refund from the retailer or your card issuer if you return a product or dispute a charge that you have already paid for. 

* You paid more than the amount owing: If you manually enter a payment amount and pay more than the amount due. You may also end up paying twice if you have autopay set up but make a manual payment around the time it withdraws. 

* You were given a statement credit for the following: Some credit cards provide sign-up bonuses or annual credits that are applied to your account once you’ve made qualifying purchases. You might be able to get a statement credit by redeeming credit card incentives. It’s possible that these credits will appear after you’ve paid your payment. 

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What Will My Account Balance Look Like on My Statement? 

* The balance will be a positive amount if you owe money to the credit card company. Your balance will be 0 if you do not owe any money or if you have paid the full amount due. Your account statement will also show a negative amount if you overpaid your bill or received a credit after you had already paid your charge. A negative balance is represented as a negative number or a number surrounded by parenthesis. 

What should you do if your account is in the red? 

There’s no need to fear if you discover your account has a negative balance. You are not required to take any action, but the following are some suggestions: 

Make a call to your creditor. 

Call your issuer if you have any questions regarding why you have a negative balance. The card issuer should be able to explain why there is a negative balance on your account. Negative balances are handled differently by most card issuers, so calling them for clarification is a good idea. 

Make a deposit request. 

You can request that the amount of a negative balance be put into your bank account if you have one. Because a negative balance is identical to a statement credit, you can do so. 

Purchase something. 

You don’t have to do anything if you have a negative account balance. You can use your credit card as usual to make purchases. Just keep in mind that whatever the negative balance amount is, you have a sort of short-term credit. 

If you have a $100 negative balance, for example, you won’t add to it until you’ve spent more than $100. You are not required to spend a negative balance immediately or in full. You can simply keep spending as usual until your account balance reaches zero. 

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Is your credit score and credit limit affected by a negative balance? 

While a negative balance may appear to be detrimental to your credit score, it is actually beneficial. Negative balances have no effect on your credit score. This is because credit scoring models treat negative balances as though they were zero. 

While a negative balance will not affect your credit score, it will limit how much you may spend on your card momentarily — but it will not raise your credit limit.

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