Santa Claus comes around just once a year. In the meantime, there are Credit Cards.
  • Credit Card Negative Balance

    A negative credit card balance happens when the balance on your credit card account is below zero. This is called a negative account balance. It means that the credit card company owes you money as you have paid in excess.

    Reasons for Credit Card Negative Balance

    • Refunds have been made into your account: At times there are refunds made to your credit card account for reasons like return of a product.
    • Excess amount has been paid by you: An overpayment from your end can result in a negative balance on your credit card account. The amount paid in was in excess of the spending during the month, hence a negative balance came up.
    • Cashback you have gotten: Cashbacks on purchase could have been credited into your card account.

    What Happens When you Have a Credit Card Negative Balance

    The excess amount in your account is usually adjusted towards charges and purchases during your next billing cycle. You can then pay less towards the next credit card bill. If are closing the credit card account, the amount will be paid back to you in cash or by cheque.

    Credit Card Negative Balance and Your Credit Score

    A negative balance does not affect your credit score. The card issuer owes you money, and so, there is a reduction in your credit utilisation ratio and this has a positive impact on your credit score.

    FAQs on Credit Card Negative Balance

    1. Am I allowed to redeem the negative balance from my credit card account?

      If you have a negative balance on the credit card, you have to wait for the credit card issuer to resolve the issue. The credit card company is by law required to make an effort to and return your amount to the credit card account.

    2. What will happen if I overpay my credit card balance?

      If you happen to overpay the credit card balance, it will show as a negative balance in your account. This means that the credit card company has to return the amount to you.

    3. How can I remove the negative balance on my credit card?

      You can request a deposit to remove the negative credit card balance. You can ask your credit card issuer if the negative balance amount can be deposited into your bank account

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