Credit Card is an amazing financial instrument that brings in lots of convenience and ease into your day-to-day life and also in your credit life. However, there is a lot of fear and concern connected with the usage of credit cards. This is mostly associated with the rate of interest charged on the cards and the drop in the credit score due to wrong usage.

The concerns seem valid as credit cards carry the highest rate of interest often going up to 48% per annum. And once you do not pay the entire amount of your credit card bill in full, you end up paying interest on the unpaid amount and any further usage too. Any non-payment of dues definitely has a negative impact on your credit score and future availability of credit, which is undesirable.

The awareness and knowledge of credit score is quite prevalent of late. Everyone looks to maintain a good credit score at all times. Hence, the term "negative" anywhere evokes an equally negative response which scares the users who think that they have done something wrong.

CreditMantri, as your credit coach, is always ready to help you navigate successfully through the maze of credit and credit products. We have looked at arming you with the right knowledge so that you can make informed decisions regarding credit. One such question that many of our readers have asked us frequently is "What does a Negative Balance on your Credit Card mean?"

Read on to know more.

A Credit Card Statement Demystified

As we said earlier, a negative balance on any of your loan or saving bank account statement is taken negatively by you. We are generally programmed to think that positive balances are the only balances that should exist in your account. However, we beg to differ slightly here.

You would remember that a credit card outstanding statement (summary) looks something like the following table:

 Statement Date 


 Total Amount Due 

 Rs 14,257.84 

 Minimum Amount Due 

 Rs 712.89 

 Pay By Date 


 Credit Limit 

 Rs 1,80,000 

 Cash Limit 

 Rs 35,000 

 Available Credit Limit 

 Rs 1,65, 742.16 


If you notice, the total amount due from you is shown as a positive figure. And ideally on the pay by date day, you are supposed to pay the entire amount due of Rs 14,257.84, and then the balance comes down to zero.  And if you pay just the minimum amount due of Rs 712.89, then your outstanding balance will  

come up to Rs 13,544.95.

Can You Arrive At a Negative Balance on Your Credit Card Statement?

In the above example, even though the amount is due from your end, the figure is shown on the positive side, i.e. we see a figure of Rs 14,257.84 and not -Rs 14, 257.84. Same is with the minimum amount due, which is nothing but a percentage (generally 5%) of your total outstanding amount. In this context, you would like to know if it is possible to arrive at a negative balance on your credit card statement. Yes, it definitely possible.

To illustrate this let us add some more details to the existing extract of the statement. These details are also a part of your credit card statement


 Previous Balance 

 Rs 13,000 

 Current Purchases and Other Charges 

 Rs 14,257.84 

 Current Cash Advance 

 Rs 0.00 

 Last Payment Received 

 Rs 30,000 

 Total Amount Due 

 (-)Rs 2742. 16 


Here, in this case, the individual had purchases and charges of Rs 13000 during the last billing cycle, however, he made a payment of Rs 30,000 instead of Rs 13,000. This could be due to oversight or even if he had intended to make a big purchase during the ensuing month and did not wish his credit utilization ratio to go down or due to any other reason. 

What does a Negative Balance on Your Credit Card Mean?

So, we saw an example that showed us that it is possible to arrive at a negative balance on your credit card. What does it mean for a customer? There is nothing to get scared or concerned with if you see a credit card statement with a negative figure. In fact, there is nothing negative about the fact that you have a negative balance.


In other words, it means that you have nothing to pay to your credit card issuer and on the other hand, money is due from them to you.


A negative balance on your credit card could arise due to many reasons. Some of them being:

  • Excess amount of payment from your end:This is one of the most common reasons for seeing negative balance on your statement. As we have seen in the example above, an overpayment resulted in a negative balance. The amount paid in was in excess of the spending during the month, hence a negative balance came up.

  • Refunds made into your credit card account: There is a possibility of refunds in your credit card account due to various reasons like return of a product or a service paid through your card, etc.

  • Cashback received into your card: Cash backs on purchase of various products and services are common of late. There might have been a credit into your card account due to such a cashback received.

What Happens When You End Up With A Negative Balance?

Generally, the amount excess in your credit card account is adjusted towards purchases and other charges during the next billing cycle and you end up paying less towards your next bill by that amount. In case you are closing your credit card account, there may be chances that the amount is paid back in cash /cheque to your account. However, this would depend upon the rules and regulations formulated by banks and it may vary between bankers.

Additional Reading: Will Incorrect Closure of Credit Card and Loan Accounts Give Negative Impact?

What is the Effect That A Negative Balance Has On Your Credit Score?

You should be glad that this is one negative balance that does not affect your credit score in a negative manner. As in case of a negative balance, the card issuer owes you money, there is a drop in your credit utilization ratio. This, in turn, is a positive factor for your credit score.

A negative balance on a credit card account is a peculiar case, do not mistake it and think that negative balances elsewhere also provide you the same kind of relief. Negative balances on all loan accounts means that you have not been regular with your repayments. So, keep your accounts in the green and enjoy being credit healthy at all times.