Will a negative balance on a credit card hurt my credit score?

Having a negative balance on your credit card simply means that your credit card issuer owes you money. (iStock)

If you’ve accidentally overpaid when making your credit card payment, it’s possible to see a negative balance on your card. The same thing can happen if you receive a refund or a statement credit shortly after paying off your balance.

However, many people wonder what having a negative balance on their credit card means and if it can be harmful to their credit score. If you’ve been wondering the same thing, keep reading. The post below will explain what you should do if your card is in the negative and why it’s not necessarily a bad thing.

What does a negative balance on a credit card indicate?

Put simply, while having a negative balance in a bank account is cause for concern, that’s not the case with a credit card. In this instance, having a credit card in the negative as a consumer just means that the credit card issuer owes you money, rather than it being the other way around. 


There are a couple instances in which this can happen:

If you’ve received a refund 

This is especially likely to happen if you receive your refund shortly after paying off your card. For example, let’s say, you bought a jacket for $100 and then decided to return it. Shortly after you make your return, you pay your credit card balance off. If your funds are returned before you spend any more money on the card, your balance will be -$100.

If you’ve earned a statement credit

A similar situation may occur if you receive a statement credit that’s larger than the balance on your card. Statement credits can happen if you earn cash-back rewards with your card. For instance, if your balance is $100 and your statement credit is worth $300, your balance would be -$200.

If you’ve prepaid for purchases 

The last instance in which a negative balance might appear on your card is if you accidentally overpaid. If, for example, you pay $200 when your current balance is $50, you would end up with a balance of -$150.

What to do if you have a negative balance on your credit card

Call your creditor 

The first thing to do if you notice a negative credit card balance is to call the consumer helpline for your card issuer. A representative will be able to point out where the overpayment occurred and will be able to tell you about the issuer’s policies regarding negative balances. 


Request a deposit

You can also request a deposit in the amount of your overpayment. In some instances, you may be able to request a deposit of the excess funds into a bank account. You may also be able to get it sent to you in the form of a check, cash or money order. 

In this case, what you would have to do is call the billing department for your card and let them know that you would like the negative balance converted. 

Continue making purchases

Truthfully, though, when you have a negative balance on your card, you don’t really have to do anything at all. Here, the negative balance acts as a temporary advance credit to your account. With this example, if you had a balance of -$50 and then made $50 worth of purchases, your new balance on the card would be $0. 


Does having a negative credit card balance hurt you?

Ultimately, having a negative credit card balance doesn’t hurt you. In fact. It doesn’t really impact you that much at all. Both your credit score and your credit limit will stay the same. The only difference is that your credit card issuer owes you money instead of it being the other way around.

Still, it’s a good idea to keep a close eye on your payments and make sure you don’t end up with a negative credit card balance too often. After all, if you have a large amount of money tied up in a negative balance, you won’t have access to it if you need it for other reasons like paying bills or buying essentials like groceries.