Credit Card Balance Transfers: What Happens Next?

Although a negative balance on your credit card bill may look strange, there’s no need to worry. Continuing the example above, if you made a $100 purchase with your card, it would result in a new balance of minus $400. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service.

credit card basicsSteps for refinancing credit card debt

There’s no way to boost your credit score by overpaying your credit card bill. You log in to your online account, choose whether you’ll pay the minimum, what happens when you overpay your credit card the statement balance, or another amount, and you submit the payment. You can also use automatic payments to make this even more convenient for you.

Can I get a refund sooner than six months?

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. What if you find that you have accidentally overpaid your credit card bill? If you have an excess, or negative, balance on your card, the federal law offers ways for your issuer to address the situation, including crediting you the amount of the overpayment. If you overpaid by quite a bit or you don’t use the card much, you should request a refund. You can do so by calling the number on the back of your credit card.

What Is a Credit Card Balance?

• By being aware of the potential pitfalls and implementing effective strategies, you can confidently manage your credit card and maintain a healthy financial footing.
• However, an accidental overpayment could leave you with a negative balance—also called a credit balance—that your card issuer owes you.
• Credit card overpayment refers to a situation in which you pay more than the outstanding balance on your credit card.
• Those are completely independent and not provided, commissioned, or endorsed by any company, as our editors follow a strict editorial policy.
• Also make sure you don’t have any automatic payments set to go through around the same time you manually make a payment.
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Your old card doesn’t automatically close after successfully transferring a balance to another credit card. It remains open and active, minus the debt you’ve moved to the new card. If you still have charges, fees or interest on your old card, you must keep paying these off. Overpaying your credit card will not have a negative impact on your credit score. Credit utilization is a significant feature of your credit score and you want to keep your utilization ratio as low as possible, ideally, under 30%.

For example, if you receive a $200 sign-up bonus as a statement credit after you’ve paid your account in full, you’d have a -$200 balance on your account. If overpaying your credit card makes sense for you, here are some tips to go about it strategically. There are several ways an overpayment on a credit card can happen, but fortunately — unlike more serious credit card mistakes — it normally isn’t a big deal.

How Credit Card Overpayments Happen

That overpayment will subtract from your new charges, resulting in a lower statement balance. The simplest way to avoid an overpayment on your credit card is to set up automatic payments. You can automate your account to pay either the minimum payment, a fixed amount or the full balance on a specific day of the month. If you choose the minimum payment or full balance option, you can rest assured you’ll pay the correct amount. While nothing negative is likely to come from overpaying your credit card, you’d probably prefer to avoid it in the future. After all, you can probably put that money to better use in your bank account than you can as a credit on your credit card account.

It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners. 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.

You’ll end up with a spending credit you can either use or get as a refund. If you want to improve your credit score, try opening a new credit card instead. The increased credit limit will lower your overall credit utilization rate and help your score. Automatic payments typically won’t go through if you’ve already paid your credit card bill.

You use it and it works great, so when your credit card bill comes on the 30th, you pay it right away. Another way to do this is if you make your payments by physical check. If you write the wrong amount on the check, the card company will get paid more than you owe them. The first question you’re likely to ask is “how is it possible to overpay my credit card bill? ” There are a few ways that this can happen, some through no fault of your own. If your contact information has recently changed, ensure your credit card company has any updated information so their good faith efforts can be fulfilled.

Erin’s work has appeared in major financial publications, including Fox Business, Time, Credit Karma, and more. Our partners cannot pay us to guarantee favorable reviews of their products or services. By being aware of the potential pitfalls and implementing effective strategies, you can confidently manage your credit card and maintain a healthy financial footing.

Federal law also dictates how long a card issuer has to issue a refund. While credit card overpayments are usually pretty simple to clear up, they can still affect your cash flow, leaving you in financial limbo until you get things sorted out. Avoiding overpayments can save you the hassle of dealing with the aftermath.