What is a negative balance on your credit card?

Signing up for credit cards through partner links earns us a commission. Terms apply to the offers listed on this page. Here’s our full Advertising Policy.

Put simply, a negative balance means your credit card issuer owes you money. When you make a payment on your credit card, you’re paying towards a balance you owe the card issuer. But in some cases, you end up paying more than the total positive balance, which results in a negative balance. 

Below we’ll explain why you might end up with a negative balance, how it affects your credit score and credit limit and what you can do with a negative credit balance.

Why do I have a negative balance on my credit card? 

Negative credit card balances can occur for several reasons, including:

  • Accidentally paying more than a card’s total balance.
  • A refund from a purchase that credits to your account after you’ve paid your balance. 
  • A credit for a promotional offer from the card issuer (think promos like Amex Offers) that shows up after paying your card in full.
  • A fee credit after you’ve already paid the card balance off. 

For example, you may have had to cancel travel arrangements, like flights and hotel reservations, due to the coronavirus pandemic. If you made these charges (and paid them off) months ago, any refunds you get might result in a negative balance on your credit card.

Regardless of the reason for the negative balance, it’s nothing to stress over. Remember, it means the bank owes you money!

Does a negative balance affect my credit score or credit limit?

No, a negative balance doesn’t hurt your credit score or affect your card’s credit limit. But it will, technically, affect the total amount you can spend on your card.

For example, if you have a credit limit of $10,000 and your negative balance is $500, you’ll have $10,500 in available credit to use. But once the $500 negative balance is spent, your credit limit will remain at $10,000. 

What should I do if I have a negative credit card balance?

Don’t hesitate to contact your bank or card issuer if you have any questions about your negative balance. They’ll be able to explain why you see a negative balance — be it because of a refund or an overpayment. You can use your statements to figure out the reason for the negative balance.

If you have a negative balance, you can either continue to use your card, allowing the negative balance to offset the new purchases. Or, contact the bank to ask for a refund check. There’s no expiration date on a negative balance soo you don’t have to make a decision right away.

Can you transfer your negative balance from one card to another?

Most banks allow you to transfer a negative balance from one account to another, provided the accounts are both with the same bank.

For example, MMS editor Meghan recently transferred a negative balance from her Business Platinum Card® from American Express to her Hilton Honors American Express Aspire Card. She had to return a large purchase at a furniture store after discovering the sleeper sofa she’d purchased was faulty. Because she’d already paid off the purchase on her card, she was able to transfer the negative balance to help pay off the balance on another card.

Don’t forget, you can also request that your card issuer send a check for the negative balance. This could make sense if you wanted to use the refund from a card issued by one bank, like American Express, to pay off a balance on a card from another issuer, like Chase.

Bottom line

If you notice that your card has a negative balance, don’t worry. A negative balance won’t affect your credit in any way. It merely means that you’ve overpaid your account, and the bank owes you money.

Call your credit card issuer to get more information and then decide how you want to manage the negative balance. Remember, it’s your money. 

Featured image by izkes/Shutterstock.


Million Mile Secrets is a contributor to Million Mile Secrets, he covers topics on points and miles, credit cards, airlines, hotels, and general travel.

Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

Join the Discussion!

Comments are closed.