Sept. 23, 2022 • 4 min read This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to
the offers listed on this page. For an explanation of our Advertising Policy, visit this page. When you first see it, the term "negative balance" can make you think you made a mistake like forgetting to pay your credit card balance. However, a negative balance on your
credit card is actually a good thing, because it means the bank owes you money instead of the other way around. Still, you may be less than thrilled to have your money tied up in a credit card account. So, we're breaking down the best things to do when you find yourself with a negative credit card balance. We'll cover the different things you can do, all requiring varying degrees of effort on your part. You'll most often have a negative credit card balance after you've made a return or received a refund for something. Recently, I experienced this when I made a return before paying the balance on my Citi® / AAdvantage® Platinum Select® World Elite
Mastercard®. However, the return didn't process until after I had paid my bill. The result? A negative balance on my card of just more than $100. For something as minor as this, I'll just use this card to spend around $100 to take care of my negative balance. However, if you have a much larger negative balance, such as after
canceling a major trip, you may want to look into other options. Related: Getting a refund after you cancel your credit card Keep spending on the cardThis is the simplest option. Just keep using the card that has a negative balance and the purchases you make on the card will eventually bring you back zero or a positive balance. With this approach, there is almost never a need to contact the bank or do anything out of the ordinary. Transfer the balance to another card on your accountIf you have a balance on another card within the same account, you can contact the bank and ask to transfer your negative balance to a card on which you owe money. This approach takes a small amount of effort, but it gives you the benefit of putting your future spend on a card that will earn you the most points rather than just trying to use the negative balance on one specific card. TPG senior credit cards editor Matt Moffitt recently had a negative balance of more than $400 on his Platinum Card® from American Express due to a refund. He also had a positive balance of around $500 on a Delta card. 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. The agent manually completed this action, and it took less than 48 hours for the balance to show up on the Delta card.
Sign up for our daily newsletter Ask for cashIf you have a significant negative balance and don't have a need to transfer it to another card, you may want to ask to receive the negative balance in cash. Often, banks will give you the cash amount through either direct deposit or they'll mail you a physical check for the amount they owe you. Again, this requires contacting the bank and possibly waiting for a check in the mail; however, it can be worth it to have the freedom to spend that money on a different card that will earn you more rewards than the card with the negative balance. Or, you may just want the cash flow. Related: How 5 minutes of chat got me 85,000 points plus $150 Bottom lineA negative credit card balance is a good thing because it means the bank owes you money. When you find yourself with a negative balance, choose the option that works best for you to use that money and maximize your rewards. The easiest way is to just spend on that particular card. However, you can also ask your bank to apply the balance to another card on your account or send you the cash by direct deposit or a check in the mail. Featured image by ISABELLE RAPHAEL/THE POINTS GUY Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities. TPG featured cardHighest Offer in 5 Years Best premium travel card for value Intro offer80,000 bonus points Recommended Credit740-850 Excellent Why We Chose ItIf you are looking to take your premium rewards to the highest level, this card is really a no brainer in our eyes. Chase's Ultimate Rewards make points easy to redeem, with a wide range of 10 airline and three hotel transfer partners and a friendly user interface. Despite the high annual fee, Chase is consistently adding new benefits to keep the card competitive in a fierce premium rewards field. Pros
Cons
Highest Offer in 5 Years Best premium travel card for value Rewards Rate
Why We Chose ItIf you are looking to take your premium rewards to the highest level, this card is really a no brainer in our eyes. Chase's Ultimate Rewards make points easy to redeem, with a wide range of 10 airline and three hotel transfer partners and a friendly user interface. Despite the high annual fee, Chase is consistently adding new benefits to keep the card competitive in a fierce premium rewards field. Pros
Cons
How long can you have a negative balance?In most cases, banks will close a checking account after 60 days of being overdrawn. Ask your bank about the terms of their overdraft policy to find out the exact length of time your account can remain overdrawn.
What happens if I overpay my credit card balance?When you overpay, any amount over the balance due will show up as a negative balance on your account. Negative balances are simply reported as zero balances on your credit report and will not affect your credit utilization. You also won't earn interest on your negative balance.
Can I use my credit card with a negative available balance?In fact, your credit card issuer may take care of the issue itself and send you a check for the negative balance amount. If you choose to, you can simply use your credit card for transactions and the negative balance will be automatically applied to the charges.
|