Imagine logging into your credit card account portal and seeing a negative balance! It may alarm you and you may have questions such as how did this happen? Why do I have a negative balance in my credit card account? However, there is no need to panic. Having a negative card balance doesn’t necessarily mean that there is any impact on your credit or that there is something wrong. 

A negative balance on your credit card account could only mean that your card company owes you money.

When you use your credit card for making a purchase, the amount is generally added to your credit card balance. This is how much you will have to pay back at a later time. Once you pay what you owe on the account, the balance turns to zero. However, what if the balance is -Rs. 1,000 or – Rs. 10,000? A negative balance on your credit card account is an indication that you’ve overpaid and that you will get back the balance amount.

In this article, we’ll discuss some of the ways in which you may end up with a negative balance. We also address other relevant queries like should you expect the credit card company to pay you back and will a negative balance have an impact on your credit score. Read on to find out.

Possible Scenarios that could result in a Negative Credit Card Balance 

A negative balance on your credit is not necessarily some form of trick. It rather means that the credit card issuer has to pay you money. Here are a few ways in which your credit account may have a negative balance:

  • A returned purchase
  • Refund of credit card fees 
  • Refund of erroneous or fraudulent charges
  • Credit granted by the card issuer for a sign-up bonus
  • You have paid more than the current bill

While the credit card company has your money, you can still be assured of receiving it back. The method by which you will get the money back is usually up to you, but one way or another, you will get the money back. 

Here are some ways in which you can get your money back:

Wait for the Refund - Credit card companies do not take long to refund what they owe you. If you have a negative balance on your credit, you can wait for the issuer to take care of the formalities around returning it.

Even in the absence of a refund request, your card issuer is mandated to make a good-faith effort and return the amount due to you. This is especially applicable if the negative balance continues for six months. 

Request a RefundIf you are facing a financial crisis, you can make use of your credit balance. To expedite the refund process, you can reach out to the credit card company’s customer service department through a phone call and request for a refund. Sometimes, credit card companies may offer several refund options, such as a check or a direct deposit to your bank account.

Irrespective of the refund option you opt for, it may take some time for the credit refund to be processed and reach you. Credit card issuers normally have a seven business days timeline to refund the amount to the cardholder. 

In case you choose the cheque mode of payment, it could take several days for the cheque to reach your home. Always ensure to have supporting evidence or proof to back up your refund request. You can send a written refund request through mail/email to the credit card issuer. 

Use the credit card for other purchases - A negative balance on your credit card is like dormant cash lying in your bank account. Rather than waiting for a cheque to reach you, you can make use of the credit card for purchases to negate the existing balance. 

For example, if you have a Rs. 10,000 balance lying in your credit card, you can buy Rs. 10,000 worth of goods at the store to bring it back to a Rs. 0 balance. It can sometimes be hard to get the credit amount to exactly zero, but some stores may allow split payments. In that case, you can add the exact amount on one of the cards and pay the remaining balance through cash or using a debit card.

Adjust it in your next credit card bill cycle - This is the most common method to utilise a negative balance on your credit card. Generally, most card issuers adjust this amount to the next bill. For example, if the negative balance in your account is -Rs. 2000, and you have purchased for Rs. 3000 in the current bill cycle, then the next bill amount will be just Rs. 1000. 

Does a negative credit card balance impact credit score?

A negative credit card balance will not have a big impact on your personal finances. This is primarily because you will receive the cash back in some way or other. 

Since a negative balance has an impact on your credit utilization ratio, you may sometimes assume that it’ll help in improving your credit score. However, the fact is that it won’t. While a negative balance results in a negative credit utilization ratio, credit agencies don’t consider this as a negative balance. Instead, the negative balance is considered as a zero balance on a credit report.


Irrespective of how you go about requesting a credit balance refund, negative balance is still your money. Thus, with a good understanding of the available options for getting this cash back, you can evaluate the refund route which is ideal for you. 

In case you don’t need the money immediately, or you are too busy to mail your credit card issuer, you can wait and let the credit card company give the cash back at the earliest.

If you are facing a financial pinch or would prefer to have the cash sooner than later, you can make use of the credit card for purchasing items which add up to the negative balance. Alternatively, you can call the credit card company and ask for a credit balance refund in the form of a cheque or direct to bank deposit.