信用卡上的负余额（Negative Balance）

In general, credit card balances are positive. For example, if you spend $100 on your credit card, your balance is $100, meaning you owe the bank $100. That needs to be paid in full after the statement is issued and before the due date.

A negative balance on a credit card (Negative Balance) means the amount you need to pay is negative—in other words, you don’t owe the card issuer money; the card issuer owes you. You can rest assured that the bank won’t close your account because of it. If your credit card balance becomes negative, some laws protect you and require the bank to “pay you back.” Different banks also have different policies on this. Today I’ll give you a summary.

Why does a balance become negative?

There are many reasons a balance can go negative. Here’s a simple summary:

  • Overpaying: If your account balance is only $100, meaning you owe $100, and you pay $150, then your account will show a -$50 balance. If you make a payment directly from the credit card side, this usually doesn’t happen. If you use Bill Pay from a checking account, it’s very possible to overpay because of a calculation error.
  • Refund: This is very common, and it usually comes from a merchant refund after a return. For example, if you buy a $100 shirt online with a credit card and pay the $100 when the statement arrives, but after the shirt is delivered you find that the wrong item was sent and return it to the merchant, the merchant may refund $100 back to your credit card after receiving the item. That would create a -$100 balance in your account. More broadly, AMEX offer cash back and various airline incidental fee reimbursements can also be considered a type of refund.
  • Rewards redemption: Many credit cards let you redeem cash back directly as a statement credit. If your balance is 0, redeeming rewards will create a negative balance. For example, if you redeem $100 in cash back on an AMEX Blue Cash Preferred account with a $50 balance, the account will show a -$50 balance.
  • Referral bonus: Some credit card referral bonuses are issued as a statement credit, such as Discover and Deserve EDU. If the account balance is 0, this will create a negative balance.

For people who pay promptly, negative balances are actually quite common. For example, I personally run into this situation a lot.

How should a negative balance be handled?

If you end up with a negative balance, there’s no need to panic. The simplest thing to do is just keep spending on the card and use up the negative balance—nothing else needs to be done.

CFPB rules

Of course, the bank won’t close your card and run off with the money. In fact, CFPB (Consumer Financial Protection Bureau) rules require the bank to take a series of affirmative steps to return the money to you.

1. Timing of refund. The creditor may also fulfill its obligations under § 1026.11 by:

i. Refunding any credit balance to the consumer immediately.

ii. Refunding any credit balance prior to receiving a written request (under § 1026.11 (a) (2)) from the consumer.

iii. Refunding any credit balance upon the consumer's oral or electronic request.

iv. Making a good faith effort to refund any credit balance before 6 months have passed. If that attempt is unsuccessful, the creditor need not try again to refund the credit balance at the end of the 6-month period.

2. Amount of refund. The phrases any part of the remaining credit balance in § 1026.11 (a) (2) and any part of the credit balance remaining in the account in § 1026.11 (a) (3) mean the amount of the credit balance at the time the creditor is required to make the refund. The creditor may take into consideration intervening purchases or other debits to the consumer's account (including those that have not yet been reflected on a periodic statement) that decrease or eliminate the credit balance.

Simply put, the bank has to try every possible way to refund you. But if 6 months of good-faith efforts still don’t work, the bank can give up. For a detailed interpretation of this rule:

Different banks handle this differently. Most banks will, after 2–3 months with no change in the negative balance, convert the negative balance into an equal-value check and mail it to your billing address. Once you receive the check, just deposit it into your bank account. Of course, this is the most passive method, and your negative balance will just sit with the bank without earning any interest.

Proactive handling

If you don’t want to spend down the negative balance, you can contact the bank after about a week—by phone, Secure Message, or online chat. Customer service can convert the negative balance into a check and send it to you. At that time, they’ll verify your mailing address. If you’ve moved, it’s better to request the check by phone so you can provide your new address. If the bank sends a check by default under the passive process, it is usually mailed only to your billing address (that is, your old address, if you haven’t updated it).

Some banks also support other ways to handle a negative balance, such as transferring it to another card for free. Here’s a summary:

  • AMEX: Yes, as long as the two cards are under the same online account. You can even transfer between business and personal cards.
  • BofA: No
  • Barclays: No
  • Capital One: No
  • Chase: Yes, and you can even transfer between business and personal cards.
  • Citi: Transfers are only allowed between personal cards; you can’t transfer between personal and business cards (because Citi business and personal cards can’t be under the same login).

Please note that this kind of balance transfer does not count as a payment, especially not as the minimum payment due. So make sure you either pay off the entire balance or manually pay the amount due.

Some banks can also send the negative balance back to your checking account via ACH, such as Discover and AMEX. You have to call customer service for them to do it. This method does not require mailing a check, and it’s a pretty good option. The following two quick reports are from KUKU’s tests:

Sending it back to your payment checking account is the easiest option, but customer service will usually ask how the negative balance came about. Normal annual fee refunds, purchase refunds, and overpayments are all fine. For negative balances created through other methods (for example, if someone else made a bill pay payment for you), it’s not recommended to call and have it transferred to checking.

Self-service handling

If you don’t want to bother customer service, you can handle it yourself online and request a check or a balance transfer.

It seems that only AMEX has this feature right now. In account services, choose inquiry dispute center, then select open a payment dispute.

Then select have credit balance on my account

After that, you can choose to have a check mailed or transfer it to another card

That said, it’s still better to contact customer service, since they can verify your address or let you choose a new one, which is more convenient.

Please note that frequent balance transfers are not recommended. AMEX may suspect that you have financial problems, which could lead to FR.

Other questions

  • Can a negative balance improve your credit score? No effect.
  • Do purchases made against the negative balance earn cash back? They probably do.
  • What happens if you receive a refund after closing the card? In general, a check will be mailed to your billing address. It’s a good idea to call and confirm the mailing address with the bank to avoid losing the check. If you’re in a hurry, calling customer service to transfer it to checking is the most convenient option.
  • Are there risks in requesting a check or transferring the balance? Yes. If your negative balance is too large—especially a large negative balance created by bill pay—requesting a check or transferring the balance directly may cause the bill pay payment to be returned by the bank (in check form). Be especially careful if the bill pay was made by someone else. The bank may also ask for the bill payer’s name and other details, which can be very troublesome. Also, AMEX pays close attention to frequent balance transfers, and too many transfers may lead to FR.
  • What should you do with a large negative balance from someone else’s bill pay? The best option is to spend it down. If that really doesn’t work, buy some Visa gift cards.

If you have any other questions, leave a comment and I’ll add more.