Why is my account showing a negative balance?

When you have a negative balance you might not be able to process refunds and payouts or receive your deposit. TPG senior credit cards editor Matt Moffitt recently had a negative balance of more than $400 on his Platinum Card® from American Express due to a refund. Instead of spending more on his Platinum Card, he used the American Express chat feature to ask an agent to transfer the negative balance and put it toward the Delta balance. The agent manually completed this action, and it took less than 48 hours for the balance to show up on the Delta card.

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict
editorial integrity,
this post may contain references to products from our partners. The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. A negative balance is an indicator that an incorrect accounting transaction may have been entered into an account, and should be investigated.

You returned something you bought with the credit card

If you don’t consent to your bank’s overdraft fees, most debit card transactions that would overdraw your account probably won’t be approved, and your account stays in the black. And they might report missed payments to the credit bureaus, which could lower your credit scores. However, all issuers are required by law to send a refund within seven business days of receiving a written request from a cardholder for refunds greater than $1.

Your credit card company might also accept requests in person or over the phone. It’s possible to have a negative balance—also known as a credit balance—on a credit card. It just means that instead of owing money to your credit card company, your credit card company actually owes you.

Request a credit balance refund

If a credit card fee is charged to your account and waived, for whatever reason, it could possibly result in a Negative balance. Depending on your bank’s policies, continuing to make payments from an overdrawn account could lead the bank to stop allowing payments or to close the account. If that happens and your payment doesn’t go through, creditors might charge you fees for bouncing your payment.

• Our experts have been helping you master your money for over four decades.
• No, this probably isn’t a typo or a rogue negative sign on the bill.
• But in order to receive the refund, you’ll need to have a current address or phone number on your account.
• To find out why the balance is negative, review the transaction history of your account online or in your app.
• Using an updated version will help protect your accounts and provide a better experience.
• If you choose to have a check mailed, the post office will take several additional days to get it to you.

And you can accidentally withdraw too much if you make a mistake when writing a check. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.

How to consolidate your credit card debt

If you have a rewards credit card, you might earn rewards in the form of a statement credit that’s applied to your balance. And that statement credit could result in a negative balance if it’s more than your current credit card balance. You’ll likely be charged a fee for each payment you make from a negative account.

Issuers must also refund any negative balance amounts on accounts that haven’t posted any purchases for more than six months. At first mention, negative balances give off a negative connotation. You may think something is wrong, when in fact it is quite the opposite. But keep in mind that negative balances reflect money owed to you by your credit card company. It may be due to a refund from a third party, or a statement credit from your credit card issuer directly.

The easiest way to bring a negative balance to $0 is to continue making purchases using the credit card. Even if the balance turns into a positive $50 from -$300, the cardholder can make another payment to pay off the positive balance. Returning a purchased item for a refund will usually result in the vendor refunding the charge to the applicable credit card. If the cardholder has already paid off any of the card’s balance, the refunded amount may cause a negative balance on the next statement. You can have a negative balance when expenses of a merchant account exceed the amount of processed payments.

For example, say that Sam has $15,000 of cleared or “good” funds in a checking account. After Sam has written and mailed out five checks of $1,000 each, the balance in the check register reads $10,000. However, the bank balance still shows $15,000, which means that the $5,000 in checks has not been cleared by the bank yet. A negative balance doesn’t factor into your payment history, so the issuer won’t send that information to the three major credit reporting agencies, Experian, TransUnion and Equifax. Any lender or business that pulls your credit reports will not know that you have a negative balance. Regardless of the process you use to request a credit balance refund, the law says that the negative balance is your money.

Paying your bill FAQs

You can take steps to prevent your bank account from going in the red. Next, take these steps to balance your account so you understand how much money you need to bring the account back to a positive balance. Of course, the offers on our platform don’t represent all financial products out there, but our goal is to show you as many great options as we can. Our partners cannot pay us to guarantee favorable reviews of their products or services. Our goal is to give you the best advice to help you make smart personal finance decisions.

We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. At 18 he ran away and saw the world with a backpack and a credit card, discovering that the true value of any point or mile is the experience it facilitates.

Once the negative balance has been used up, the cardholder may continue to make purchases or close the account if desired. When you use your credit card to make a purchase, the total amount borrowed will appear as a positive balance on your credit card statement. A minus sign will appear before the number of your current balance, such as -$200.

• A negative balance occurs when the ending balance in an accounting record is the reverse of the expected normal balance.
• Having a negative credit card balance is not a big deal to your personal finances, as you will get that cash back one way or another.
• If you’d prefer, you can also request a check, money order, or even cash in the amount of the negative balance.
• Finally, deposit enough money into your account to fully cover the negative balance, including fees.