In summary, having a negative credit card balance does not always indicate that you have done something improper. It could simply mean that you’ve received a refund or statement credit. Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect.
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Have you ever opened your Capital One credit card statement and seen a negative balance? If so, you might be wondering what it means and what you should do about it. Don’t worry, we’re here to help!
What is a negative balance on a credit card?
A negative balance on a credit card simply means that you’ve paid your credit card company more than you owe. This can happen for a few different reasons, such as:
- Overpaying your credit card bill: If you accidentally pay more than your current balance, you’ll end up with a negative balance.
- Refunds for returned purchases: If you get a refund from a merchant, it may be applied to your credit card balance, resulting in a negative balance.
- Statement credits: If you have a rewards credit card, you might earn rewards in the form of a statement credit that’s applied to your balance. This could also result in a negative balance.
- Waived fees: If a credit card fee is charged to your account and then waived, it could possibly result in a negative balance.
- Fraudulent & disputed charge reversals: If a fraudulent or disputed charge is credited to your account, it could lead to a negative balance.
Does having a negative balance impact credit scores?
Having a negative credit card balance probably won’t hurt your credit scores. In fact, it could actually help you improve your credit scores. This is because a negative balance can lower your credit utilization, which is a measure of how much of your available credit you’re using. Experts recommend using no more than 30% of your available credit. If you have a negative balance, your credit utilization for that card would be less than 30%, which could be good for your credit scores.
What can you do about a negative credit card balance?
If you have a negative credit card balance, you have a few options:
- Spend down the negative balance: You can simply use your credit card like you normally do, and your credit card company will apply the negative balance toward your purchases.
- Request a refund: You can request a refund from your credit card company. Your credit card company must send you a refund within seven business days of getting your written request if you overpay your credit card by more than $1.
- Do nothing: You can do nothing and your credit card company will eventually send you a refund.
What about a negative balance on a Capital One checking account?
It’s important to note that this information only applies to credit card balances. If you have a negative balance on a Capital One checking account, it’s important to contact Capital One customer service to resolve the issue.
Here are some additional resources that you may find helpful:
- Capital One Learn & Grow: https://www.capitalone.com/learn-grow/
- Capital One Credit Card FAQs: https://www.capitalone.com/learn-grow/money-management/credit-card-faqs/
- Capital One Customer Service: https://www.capitalone.com/contact/
Is my credit limit higher now that I have a negative balance?
According to Ashley Tufts-Freimuth, vice president of corporate affairs and communications at American Express, “overpaying does not mean you have a higher credit limit.”
“Your credit limit stays the same, but a cardholder can spend more than that limit (up to the overpayment amount) without going over their credit limit.” ”.
Tufts highlights overpayments, but if a refund or statement credit contributed to your negative balance, the same reasoning should hold true.
You can theoretically spend $10,100 on your credit card before going over your credit limit if your credit limit is $10,000 and your balance is $100. (Most experts recommend keeping your credit card utilization below 30%, so treat this as purely hypothetical. ).
Your credit limit is typically set by the issuer when you apply for your credit card. Don’t treat a negative balance as a de facto credit limit increase; instead, ask the card issuer for an increase in your credit limit, which may or may not result in a hard credit inquiry.
If you log in to your credit card account portal and see a negative balance, you may be alarmed. How did this happen? What does it mean?
Despite popular belief, a negative credit balance on your credit card account does not always indicate that you have less available credit or that you have committed a mistake. Actually, a negative credit card balance could just indicate that you owe money to your card issuer.
Your credit card balance, or the total amount you owe on that account at any given time, is usually increased by the amount you make purchases with your credit card. Paying off a credit card generally means bringing the account balance down to $0.
However, what happens if your credit card balance is negative? If it’s less than zero, it could indicate that you’ve paid more than you should have.
Other events that could cause a negative credit card balance include …
- A returned purchase
- A reimbursement of specific credit card costs (such as interest, late fees, annual fees, etc.) ).
- A refund due to an erroneous or fraudulent charge
- a statement credit that the card issuer offers as a part of a promotion or sign-up bonus
Greg Johnson, co-founder of Club Thrifty, explains that there are instances when you may be issued a statement credit, such as rewards card redemptions.
He warns, “You could end up with a negative balance should you make a payment toward your balance and then claim a statement credit.”
Johnson illustrates how this might work: “Let’s say your outstanding balance is $500. You make a payment of $400; then claim a statement credit toward travel expenses of $300. You would then end up with a balance of -$200. ”.
In most of these situations, you have options for how to handle the resulting negative balance.
We’ll get to that. But first, let’s dive into some common questions associated with having a credit card with a negative balance.