What to do? – Councilor Forbes


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When is a negative a positive? When it comes to a credit card balance. A few conditions can result in a negative credit card balance, but that’s not a bad position. Whenever a negative amount appears on a credit card balance, it means the bank owes the account holder money. The negative balance will either reset to zero or become a positive balance as the cardholder charges for additional purchases.

Find the best credit cards for 2022

No credit card is the best option for every family, every purchase or every budget. We’ve selected the best credit cards in a way designed to be most useful to the widest variety of readers.

What is a negative balance on a credit card?

Credit card statement balances represent the amount a cardholder owes a credit card company. Purchases, cash advances and balance transfers are added to the monthly statement balance. In some situations, a cardholder may find a negative balance, which means the credit card company owes the cardholder money. This additional credit appears with a minus symbol in front of the dollar amount (eg – $ 500).

Any future purchases made will be added to any negative balance.

How to get a negative balance on your credit card?

You overpaid your credit card bill

Cardholders can overpay a monthly bill. This happens in error when a cardholder manually enters a total amount greater than the current balance when paying online.

If an automatic payment feature pays your bill before a manual payment is processed, a negative balance can also result. Payments by check and any type of online payment made within the same billing cycle could also result in a negative balance.

You have returned something that you bought with the credit card

Returning an item purchased for a refund will generally result in the seller being reimbursed for the charge to the applicable credit card. If the cardholder has already paid a portion of the card balance, the refunded amount may result in a negative balance on the next statement.

You may also see a negative charge appear on your monthly billing statement. Refunded amounts will usually show up as negative charges (e.g. $ 150) while regular purchases will show up as positive charges (e.g. $ 50). All charges are in addition to the sum of the monthly balance.

You have collected too many rewards

Some credit cards offer cardholders bonus rewards or statement credits based on certain purchases. If the cardholder pays the balance each month, a later statement reward or credit may appear as a negative balance on a subsequent statement.

Negative credit card balance: main points

Having a negative credit card balance isn’t a bad thing, but there are a few things to consider:

  • Negative balances do not affect credit. Most credit models generally consider negative balances to be equal to a balance of $ 0. This means that a negative balance will not hurt your credit score.
  • Negative balances will not improve your credit score either. Frequent card users are likely to zero a negative balance within a short period of time, meaning there may not be a long-term effect on their credit utilization rate (which can have a huge impact on a credit score).
  • A negative balance means that a cardholder is generally in good standing. Paying off your balance each month will help keep your credit usage low, make payments on time, and maintain or improve a good credit rating. Finding a credit account with a negative balance likely means you’re on top of your bills and tracking your financial decisions.
  • Having a negative balance can make closing a credit account more onerous. While not the worst consequence to deal with, closing a credit account with a negative balance means that there are still a few steps you need to take to get your money back and close the account for good.

How to get your money back from a negative balance

It is in the cardholder’s best interest to use any negative balance on a credit card statement. It may not be the same as cash on hand, but it has value. Once the negative balance is used up, the cardholder can continue to make purchases or close the account if they wish.

Leave the balance alone and decide later

A negative balance will usually remain in an account for at least 60-90 days before the bank decides to refund the money by check or cash deposit to a linked account. Since the card issuer is indebted to the cardholder, there is no monthly payment required and there is no risk of interest accumulation. The cardholder can use the time to determine whether they want to continue using the card to make purchases or close the account and request a refund. Card issuers likely won’t pay you interest if your balance is negative.

Use your credit card for additional purchases

The easiest way to reduce a negative balance to $ 0 is to continue shopping with the credit card. Even if the balance becomes positive by $ 50 from -300, the cardholder can make another payment to pay off the positive balance.

Get your money back as a credit balance refund

If there is a large negative balance, say $ 1,000 or more, the cardholder can request a refund from the credit card company by check or direct deposit. While this often makes more sense for larger balances, it is not necessary to have a larger negative balance to request a refund.

According to the Truth in Lending Act, card issuers must pay off any negative balances greater than $ 1 within a reasonable time. The cardholder must apply first, but some banks will automatically issue a check for a negative balance after 60 or 90 days.

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

If you have a negative balance when closing a credit card account, chances are the card issuer will resolve this by refunding the money before officially closing the account. However, you can end up with a negative balance if you get a final refund right before the account is officially closed. Once this happens, access to your online account may be cut off. In this case, contact the card issuer by phone and request an account investigation for a refund. Ideally, do this within 30 to 60 days of the account closing.

Remember: it’s your money

Negative balances reflect what the card issuer owes you, the cardholder. Do not hesitate to request a credit on your current account. While card issuers are required to respond to a request for repayment of more than $ 1 under the Loan Truth Act, it is your responsibility to make the request within a reasonable time.

Find the best credit cards for 2022

No credit card is the best option for every family, every purchase or every budget. We’ve selected the best credit cards in a way designed to be most useful to the widest variety of readers.

Final result

Negative balances ring, well, negative. But negative balances are amounts the card issuer owes the cardholder, usually a positive thing for a consumer. A negative balance usually means that the cardholder has received a refund for a purchase, a cancellation for a fraudulent purchase, a credit card reward, or a statement credit. Use a negative balance when making purchases with the card or requesting a refund from the card issuer.

Frequently Asked Questions

Will a negative credit card balance affect your credit score?

No, a negative balance does not affect a credit rating. Most credit models consider negative balances equivalent to a $ 0 balance, which means negative balances don’t hurt credit scores. Negative balances will also not positively affect a score.

Statement Balance vs Current Balance: What’s the Difference?

A statement balance is an amount the cardholder owes on purchases, cash advances, or balance transfers made during the last monthly billing cycle. Current balances show how much the cardholder owes in total, to date. Processing card payments typically takes a few business days, so current online balances may not change immediately after payment.

Can an outstanding credit card balance be negative?

No. Overdue and negative balances are not the same. Outstanding balances represent what the cardholder owes the card issuer. A negative balance, on the other hand, represents what the card issuer owes the cardholder.

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