What Happens if You Overpay Your Credit Card Bill?

Reach out to your card issuer to learn more about your options. If you overpay your credit card your account’s balance will go negative. That means that the card company owes you money, rather than you owing the card company money.

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• So the chances of getting a new loan or credit card may be slim.
• When you pay a credit card bill online, you have the option to enter a custom payment amount.
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An overpayment on your credit card will be applied as a credit to your account and may appear as a negative balance in your online account or on your billing statement. For example, if your current balance (including interest and pending charges) is $100 and you make a $150 payment, you would have a -$50 balance. 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.

Leave the negative balance to roll over next month

Plus, you’ll have a few options for getting back the amount you’re owed. If you notice an overpayment, it can be a good idea to contact your credit card issuer, particularly if the overpayment was significant. If you do nothing, and the excess remains, banking regulations require that your credit card issuer attempt to send you a refund after six months.

• So, you can’t get a negative utilization ratio on one card to offset high usage on another.
• Avoiding overpayments can save you the hassle of dealing with the aftermath.
• A credit card balance is the total amount of money currently owed by a cardholder to their credit card company.
• The statement balance does not include any charges incurred or payments made on the credit card after the statement closing date.
• This can effectively drop your credit utilization ratio down.

But if you do have one, it could have happened for a variety of reasons. Earn Chase Ultimate Rewards® on everyday purchases and redeem for travel, cash back and more. See all our rewards credit cards and choose one that’s right for you. Sometimes overpayment of large sums can be the result of mistakenly adding an extra zero to your payment. But it is also a potential sign of refund fraud or even money laundering.

What happens if I overpay my credit card?

But once again, that lag time during payment processing could lead to an overpayment. You could lose the overpaid amount if the card issuer tries to refund you but doesn’t have your latest contact information or bank account details and is unable to contact you. A similar case involves credit offered as a credit card benefit. For example, a travel rewards credit card might provide statement credits toward incidental airline fees. It’s important to note that it is up to the issuer’s discretion how they would like to respond when you request a refund. Contact your issuer and try requesting a refund for the amount paid over the minimum due.

• For example, you make a $100 purchase on the 5th of the month and pay off your credit card bill on the 15th.
• The issuer gives you a statement credit for the amount overpaid.
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• Usually, an overpayment is all about timing, and there are different ways overpayments can happen.

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. If you’d rather have the money back now, you can contact your card company and ask for a refund. To learn more about the ins and outs of credit card payments, check out our payment FAQs. A negative credit card balance will not hurt your credit score.

Credit card default: How it happens, what to do about it

Fortunately, there are some relatively simple steps you can follow to use the overpayment or have it refunded. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional. Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page.

• You can do so by calling the number on the back of your credit card.
• For example, if your current balance (including interest and pending charges) is $100 and you make a $150 payment, you would have a -$50 balance.
• Overpaying your balance won’t do anything to help improve your credit score or help make up for missed payments.

A very important part of your credit card statement is the statement balance, and that’s calculated at a specific time every month. Usually, an overpayment is all about timing, and there are different ways overpayments can happen. It can be annoying to find that you’ve overpaid your credit card by mistake. However, there’s good news—you can get reimbursed by either making new purchases or requesting a refund from your card issuer. When you overpay a credit card, it means you’ve paid more than the full amount due on your account. For example, if you have a balance of $100, but pay $200 instead, you’ve overpaid your credit card.

What it means to have a negative balance and what you can do if you overpay your credit card.

You can keep your credit score intact or improve it by paying the bill before the card issuer reports to the credit reporting agency. Doing so ensures that there’s a lower balance reported to the credit bureaus each month. Payments are also a key component of your credit card balance and it’s always advisable to pay off your statement balance in full before the due date.

This might happen if you’ve set up automatic payments and then also manually pay the amount due, or if you accidentally type in an extra digit when paying your balance. A credit card balance is the total amount of money currently owed by a cardholder to their credit card company. Balances change based on when and how they are used—they increase when purchases are made and decrease when cardholders make payments.

How You End Up Overpaying Your Credit Card

Overpaying your card won’t have impacted your credit, and you might have the chance to earn a valuable credit card sign-up bonus. If you have a negative balance and want the money back, you can make a written request of your credit https://accounting-services.net/what-happens-if-you-overpay-your-credit-card-bill/ card company for a refund. Your credit card company might also accept requests in person or over the phone. If you have a rewards credit card, you might earn rewards in the form of a statement credit that’s applied to your balance.