What Is a Negative Balance on a Credit Card?

Seeing a negative balance on your credit card statement or online account may be confusing, but rest assured: It doesn’t mean that you owe any money to the credit card issuer. In fact, having a negative balance means they owe you money. While this may raise some questions, a negative balance is not typically a cause for alarm.

Let’s explore what it means to have a negative balance, why it may have happened and what to do when you have one.

What does a negative balance mean?

A negative balance means you have paid more than you owe to the credit card issuer. As a result, your balance is below 0. This can happen for a variety of reasons, but it’s generally not something to worry about and can be resolved with minimal effort.

Reasons you might have a negative balance

There are several reasons why you may have a negative balance:

• Overpayments: If your credit card issuer allows overpayments, you may have accidentally paid more than you owe toward your credit card bill.
• Statement credits: If your rewards are set up to be automatically redeemed as statement credits, this may result in a negative balance.
• Refunds: A returned item may have been credited toward your account after you paid off your other charges.
• Fee waivers: If you got a credit card fee waived after paying off your credit card balance, this can also lead to a negative account balance.
• Fraudulent charge reversals: You aren't responsible for fraudulent charges to your account. Once the credit card issuer is aware of and reverses those charges, you may see a negative balance.

Does a negative balance impact your credit score?

A negative balance shouldn’t hurt your credit score. In fact, it can lower your credit utilization ratio, which is the amount of revolving credit you’re using. That can improve your creditworthiness.

What should you do when you have a negative balance?

You have a couple of straightforward options when you have a negative balance:

• Spend the negative balance: The simplest thing to do is make additional purchases with your card to spend the balance.
• Request a refund: If you don’t want to make additional purchases with this card or you prefer to have that cash on hand, you can contact the issuer’s customer service department online, via email or by phone and request a refund.

Negative credit card balance FAQs

What happens if a credit card balance is negative?

There are no negative consequences for having a negative credit card balance. In fact, a negative credit card balance just means that your issuer owes you money. You can put those funds toward future purchases or receive a refund, if desired.

Does a negative credit card balance increase my credit limit?

A negative credit card balance doesn’t increase your card’s credit limit. In effect, you’d be able to spend up to that limit, plus the balance that’s owed to you. Once you spend that negative balance, however, you would still be held to your original credit limit.

How long does it take to receive a refund from a negative credit card balance?

It depends on your credit card issuer and the refund method you choose. For example, a direct deposit refund may be faster than receiving a paper check in the mail.

Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.