It may be alarming to log into your bank card portal and see a damaging account steadiness. However a damaging bank card steadiness sometimes means you have overpaid your bank card invoice or obtained a refund or credit score.
In contrast to noticing a damaging steadiness in your checking account, a damaging steadiness in your bank card account signifies that the cardboard issuer owes you cash.
Under, we’ll break down what a damaging steadiness in your bank card is, why you would possibly see a damaging steadiness and what it means for your credit score rating.
What does a damaging bank card steadiness imply?
A damaging steadiness on a bank card, also called a credit score steadiness, is a credit score to your account when your steadiness is under $0. It signifies that the cardboard issuer owes you an sum of money.
For instance, in case your bank card steadiness displays -$67.42, it means you have got a credit score for that quantity obtainable in your account. You should use this credit score to pay for brand spanking new purchases. Relying in your card issuer, you may additionally have the ability to have the credit score transferred to your checking account or despatched to you by way of test.
This damaging steadiness would not change your bank card restrict. When you spend this credit score, you may faucet into your normal bank card restrict.
The explanation why you could have a damaging bank card steadiness
Your bank card account might mirror a damaging steadiness for a couple of causes:
- You overpaid your bank card invoice.
- You obtained a refund that dropped your steadiness under $0.
- Fraudulent prices had been refunded to your account after you paid your bank card steadiness.
- You obtained a rewards assertion credit score from a purchase order you made.
- A payment was waived out of your bank card, reminiscent of an annual payment.
For instance, for instance you purchase a sweater utilizing your bank card for $30 and later return it. In the event you already paid your bank card steadiness in full, you may probably obtain a $30 credit score as soon as the return hits your bank card account.
In the event you’re undecided why you are displaying a damaging steadiness, contact your bank card issuer.
What occurs to your credit score rating if in case you have a damaging bank card steadiness?
A damaging steadiness in your bank card account will not harm your credit score rating as a result of you do not have an excellent steadiness to pay. It additionally will not increase your credit score rating.
Nonetheless, in the event you proceed to follow good credit score habits like paying your steadiness in full and maintaining your credit score utilization low, it will probably assist your credit score rating total.
How you can repair a damaging bank card steadiness
It is value noting that you do not have to appropriate a damaging bank card steadiness — it will not harm your credit score rating or jeopardize your account. Nonetheless, in order for you the damaging steadiness to vanish, the best manner is to make a purchase order that is equal to or bigger than the credit score in your account.
For instance, if in case you have a $100 credit score steadiness, you may cost a $110 grocery expense together with your card to make the most of the credit score. This may then carry your account as much as a optimistic $10, which you’d must repay earlier than the top of your billing cycle to keep away from curiosity.
The underside line
In the event you discover a damaging steadiness in your bank card, it means the cardboard issuer owes you cash and has posted a credit score to your account. This will occur whenever you overpay your bank card invoice or return an merchandise utilizing your bank card. When you spend the credit score quantity, the damaging steadiness will disappear out of your account.
