This is distinct from a zero balance, as it represents a temporary credit that the card company must honor. Refunds and Credits One of the most common causes is a refund that surpasses your current balance.
Avoiding Negative Balance Mistake Payments: Refunds and Credits Explained
Some issuers may close accounts with persistent negative balances after a long period, potentially sending the funds to a dormancy fund. Responsible management of this status demonstrates to lenders that you are in control of your debt levels.
This situation often arises when the card issuer owes you money, typically because you overpaid your bill or received a refund that exceeded your outstanding balance. Regularly checking your online portal ensures you are aware of the status and can claim the money if necessary.
Avoiding Negative Balance Mistake Payments and Overpayment Refunds
How to Manage It You have the option to keep the negative balance as a permanent credit, or you can request a refund from the card issuer. If you choose to keep it, the funds will automatically apply to future statements.
More About Why is my credit card balance negative
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