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What is a credit utilization ratio?
This strategy saves you the most money, but it can take a while to see progress (but then a lot of progress might happen at once, like an avalanche). Once a budget is in place, look for areas to cut, such as trimming your entertainment spending or cooking more at home. Using budget and money-tracking apps and reviewing your spending daily will help you stick to your goals. “Overpaying does not mean you have a higher credit limit,” says Ashley Tufts-Freimuth, vice president of corporate affairs and communications at American Express. We recommend this method if you have a large negative balance so you can have negative balance on credit card access to those funds quickly. A dedicated team of CreditCards.com editors oversees the automated content production process — from ideation to publication.
If you’ve already paid off your bill and then end up canceling something (like a prepaid hotel stay), it will be credited to you by the merchant and returned to your account. CreditCards.com credit ranges are derived from FICO® Score 8, which is one of many different types of credit scores. If you apply for a credit card, the lender may use a different credit score when considering your application for credit. You are now leaving the SoFi website and entering a third-party website. SoFi has no control over the content, products or services offered nor the security or privacy of information transmitted to others via their website. We recommend that you review the privacy policy of the site you are entering.
Stay up-to-date on the latest credit card news 一 from product reviews to credit advice 一 with our newsletter in your inbox twice a week. 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 the money remains on your account for more than six months, the lender is obliged to make a good faith effort to refund you the money. This includes putting in an effort to trace you using your last known telephone number and address. If this effort is not successful, the law doesn’t impose any further obligation on the lender. Also, if you had a fee canceled or removed from your account, this could happen as well.
- In most cases, you will need to contact your card issuer about your refund.
- For example, if the limit is $5,000 and the issuer owes you $200, your new credit limit isn’t $5,200.
- This is still your money, and you are entitled to receive a refund.
- Any time a negative dollar amount shows up on a credit card balance, it means the bank owes the account holder money.
Request a credit balance refund
A 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. For example, Capital One’s Quicksilver card offers a one-time $200 cash bonus to new cardholders who spend $500 on purchases within the first three months of opening the card. Depending on where your balance currently stands, you could end up with a negative balance as a result of that additional $200. Your payment history, credit utilization ratio, credit variety and length of credit history impact your credit score. A negative balance is typically interpreted as a $0 balance, which will have a neutral impact on your credit score.
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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. Most credit models consider negative balances equivalent to a $0 balance, which means negative balances don’t hurt credit scores. If you have a negative balance and want the money back, you can make a written request to your credit card company for a refund. Your credit card company might also accept requests in person or over the phone. If you’ve already paid down your balance and a fraudulent or disputed charge is credited to your account by your credit card company, it could lead to a negative balance.
We’ve picked the best credit cards in a way designed to be the most helpful to the widest variety of readers. If you feel like your credit card debt has gotten out of hand, you’re not alone. According to Experian, the average amount of credit card debt per cardholder has increased 10% since 2023, and to many people the debt can feel insurmountable. There are a few ways to get your money back when you have a negative credit balance. You can use this overpayment strategically if you plan to use more than your credit limit on a large purchase (or a group of purchases that add up). While a negative balance isn’t something to worry about, you might wonder why it’s happening and if you can do anything to avoid it.
For example, if you pay $500 every month but only made $450 in purchases this billing cycle, you’ll have a negative balance of $50. It’s important to exercise caution when you close any credit card account. Closing a credit card has the potential to hurt your credit scores. Michelle Lambright Black is a leading credit expert, author, writer, and speaker with over a decade and a half of experience in the credit industry. She is an expert in credit reporting, credit scoring, financing (mortgages, credit cards, loans), debt eradication, budgeting, saving, and identity theft. She is featured monthly at credit seminars, podcasts, and in print.
This extra credit shows up with a minus symbol in front of the dollar amount (e.g. -$500). In fact, a negative balance on your credit card account could simply mean that your card issuer owes you money. A negative credit card balance is when the credit card issuer owes the cardholder money instead of the cardholder owing money to the credit company.