It can be alarming to log into your credit card portal and see a negative account balance. But a negative credit card balance typically means you’ve overpaid your credit card bill or received a refund or credit.
Unlike noticing a negative balance on your bank account, a negative balance on your credit card account indicates that the card issuer owes you money.
Below, we’ll break down what a negative balance on your credit card is, why you might see a negative balance and what it means for your credit score.
What does a negative credit card balance mean?
A negative balance on a credit card, also known as a credit balance, is a credit to your account when your balance is below $0. It indicates that the card issuer owes you an amount of money.
For example, if your credit card balance reflects -$67.42, it means you have a credit for that amount available on your account. You can use this credit to pay for new purchases. Depending on your card issuer, you may also be able to have the credit transferred to your bank account or sent to you via check.
This negative balance doesn’t change your credit card limit. Once you spend this credit, you’ll tap into your usual credit card limit.
Reasons why you may have a negative credit card balance
Your credit card account may reflect a negative balance for a few reasons:
- You overpaid your credit card bill.
- You received a refund that dropped your balance below $0.
- Fraudulent charges were refunded to your account after you paid your credit card balance.
- You received a rewards statement credit from a purchase you made.
- A fee was waived from your credit card, such as an annual fee.
For example, let’s say you buy a sweater using your credit card for $30 and later return it. If you already paid your credit card balance in full, you’ll likely receive a $30 credit once the return hits your credit card account.
If you’re not sure why you’re showing a negative balance, contact your credit card issuer.
What happens to your credit score if you have a negative credit card balance?
A negative balance on your credit card account won’t hurt your credit score because you don’t have an outstanding balance to pay. It also won’t boost your credit score.
However, if you continue to practice good credit habits like paying your balance in full and keeping your credit utilization low, it can help your credit score overall.
How to fix a negative credit card balance
It’s worth noting that you don’t have to correct a negative credit card balance -- it won’t hurt your credit score or jeopardize your account. However, if you want the negative balance to disappear, the easiest way is to make a purchase that’s equal to or larger than the credit on your account.
For example, if you have a $100 credit balance, you could charge a $110 grocery expense with your card to utilize the credit. This would then bring your account up to a positive $10, which you’d need to repay before the end of your billing cycle to avoid interest.
The bottom line
If you notice a negative balance on your credit card, it means the card issuer owes you money and has posted a credit to your account. This can happen when you overpay your credit card bill or return an item using your credit card. Once you spend the credit amount, the negative balance will disappear from your account.
