What happens if my credit card available balance is negative?

That Negative Credit Card Balance? It’s Probably Good News.

Finding a negative balance on your credit card statement might initially cause a flicker of panic. After all, we’re conditioned to associate negative numbers with debt. But in this case, a negative balance is usually a positive sign, indicating an overpayment or a credit adjustment by your card issuer. Instead of owing money, your card issuer actually owes you money.

This unexpected windfall can arise from several scenarios:

• Refunds: A significant return on a purchase, perhaps a large appliance or an expensive item, can easily push your credit balance into negative territory. The refund exceeds the amount you currently owe, leaving a credit in your favour.

• Reversed Charges: If a transaction is disputed and successfully reversed, the amount will be credited back to your account. This reversal could lead to a negative balance, especially if the disputed charge was substantial.

• Waived Fees: Credit card companies sometimes waive annual fees or other charges as a gesture of goodwill or due to a service error. This credit, applied to your account, might result in a negative balance if it’s larger than your outstanding debt.

• Credits Applied to Your Statement: Various reasons can lead to credits being applied. This could be a result of a promotional offer, a settlement agreement on a disputed charge, or even an internal accounting adjustment by the credit card company.

What Should You Do with a Negative Balance?

The simplest and often best course of action is to do nothing. Most credit card companies will automatically apply the credit to your next statement, essentially reducing your future purchases. However, you might want to:

• Contact your credit card company: While usually unnecessary, contacting customer service can confirm the reason for the negative balance and ensure there are no underlying issues. This is particularly helpful if you’re unsure why the credit appeared.

• Request a refund: In some cases, you may prefer to receive the overpayment as a direct refund. Contact your card issuer and inquire about this option. They’ll likely process a check or deposit the funds back into your linked bank account.

• Keep a record: Maintain a record of the transaction that led to the negative balance. This is helpful for accounting purposes and provides a reference should you need to resolve any discrepancies.

In conclusion, a negative credit card balance is generally not something to worry about. It’s a sign that you’ve either overpaid or received a credit. While contacting your credit card company can offer reassurance, the most likely outcome is simply a reduction in future charges or a prompt refund. Enjoy the unexpected bonus!