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And if you’re using more than 30%, your credit score can take a hit. If you’ve overpaid by a large amount, it may be helpful to use your credit card to cover some of your large monthly bills or expenses. We believe by providing tools and education we can help people optimize their finances to regain control of their future. While our articles may include or feature select companies, vendors, and products, our approach to compiling such is equitable and unbiased. The content that we create is free and independently-sourced, devoid of any paid-for promotion. If you suddenly overpay your card by a large amount, especially if you use a new that could worry a card issuer.

If you have a negative credit card balance on your account because you paid more than you owed, it’s what’s known as an overpaid credit card. Normally, a negative balance on a financial account is a bad thing — such as when you overdraft a chequing account. If you overpay your credit card bill, the excess amount will remain on the card as a spending credit, also known as a credit balance, that you can use. Most card issuers list the credit amount as a negative balance on the card. Overpaying your bill won’t make up for any past missed or late payments, and it won’t increase your credit score or your credit limit. When you overpay, any amount over the balance due will show up as a negative balance on your account.

  1. This can range from a few months to a year, depending on the terms and conditions of your credit card agreement.
  2. Offer pros and cons are determined by our editorial team, based on independent research.
  3. Erin is a personal finance expert and journalist who has been writing online for nearly a decade.
  4. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced.
  5. If you make a manual payment a few days before an automatic payment is scheduled, the manual payment may not process in time to stop the automatic payment.

Understanding these potential consequences can help you make informed decisions when it comes to managing your credit card payments and avoid the unnecessary drawbacks of overpaying. If you’d rather control how much you pay and when you make the payment, it’s up to you to monitor your credit card balances and due dates. Luckily, your issuer can still help you with that task if you set up account alerts. You’ll get credit card notifications about your balance, payments due and more, depending on what you opt into. Usually, you can set up alerts online or through the credit card app when you sign in to your account.

Then, your card issuer will have seven days to send you a refund after receiving your request. It may be easier to spend the negative balance, particularly on a credit card that you use often. New purchases will continue to reduce the negative balance, so you won’t owe anything until you’ve exhausted the overpayment and you’ve started accumulating a balance that you owe. For example, if you have a -$50 balance and make a $50 credit card purchase, your account balance will be at $0. If you’re like me, you sometimes like to pay off your credit card balance during the month without waiting for your statement to come in. If you have automatic payments turned on, this can result in excess payments.

What To Do if You Overpay Your Credit Card?

Getting a refund from a merchant is another way you might end up with a negative balance. If you pay off your balance before getting a refund or if the refund is more than your current balance, that refund would result in a negative balance. Fortunately, there are some relatively simple steps you can follow to use the overpayment or have it refunded. A mistake on a payment amount can happen whether you pay your bill online or by check.

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The credit balance will hance be used towards your new purchases. If you have a small negative balance on your card, it may make sense to just let it roll over to the next month’s statement. But if the amount is significant and you need the money, you can request a refund.

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You might request a direct deposit to your bank account or a check. The amount overpaid will show up as a credit in your account and your balance will appear as a negative dollar figure. That amount will be applied to the charges in the next statement and effectively reduce that balance due. Overpayment on your credit card does not improve your credit rating overpaying credit card or increase your card’s limit. This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.

Otherwise, you’ll end up losing money by still paying significant interest. Whether you choose to work with a financial advisor and develop a financial strategy or invest online, J.P. Morgan offers investment education, expertise and a range of tools to help you reach your goals. Morgan Wealth Management Branch or check out our latest online investing offers, promotions, and coupons.

If you don’t have it yet, download the Bright app from the App Store or Google Play. Connect your bank account and your cards, set your own goals, then let Bright get to work. Having a negative balance on a credit report does not lower or raise your score. MyBankTracker generates revenue through our relationships with our partners and affiliates. We may mention or include reviews of their products, at times, but it does not affect our recommendations, which are completely based on the research and work of our editorial team.

Log into your online account or mobile app to see your card’s specific autopay options. Federal regulation requires creditors to follow up within seven business days of receiving the request. Your refund may come in the form of cash, check, money order or direct deposit to a registered bank account. Take note of when you should expect your refund, and follow up with your issuer if you don’t receive it by that date, to ensure the refund was processed correctly.

In fact, a negative credit card balance has the same effect on your score as a balance of $0. If you enter the amount you’d like to pay incorrectly, whether it be by swapping or adding an extra digit, you can pay more than you owe. Many card companies limit you to paying no more than the full balance, but some do allow you to overpay. https://accounting-services.net/ If this happens, you’ll wind up sending more money to the credit card company than you owe them. A potential misconception is that overpaying your credit card can improve your credit utilization. Your credit utilization is the percentage of your available credit that you use, and a lower percentage is better for your credit score.

If the lender is really worried about fraud, they’ll want to confirm that they’re really speaking to you and not someone who has stolen your identity. While you won’t have any problems because of an overpaid credit card, keep in mind that there’s also no good reason to leave your card that way. It doesn’t help your credit score, and there are no advantages for you. If you have any doubt that you’ll use the credit balance within a month, you should go ahead and get your money refunded.

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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. While you generally won’t be penalized for overpayments, there are instances when a large overpayment may look suspicious and subsequently considered credit card fraud. In such cases, you may be alerted of fraud or asked to verify your payment and identity. If you find yourself in this situation, you can contact your issuer by calling the number on the back of your credit card.

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