What happens if you overpay a credit card

This is the easiest option, and it works well with credit cards that you use often. 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. The card issuer will either issue a refund to the payment account or send you a check. This shouldn't take longer than seven to 10 business days, and it's often done much more quickly.

The one thing you shouldn't do is keep a negative balance on your credit card. There's no benefit to letting a credit card company hold on to money that could be earning you interest in a bank account. The biggest issue with overpaying a credit card is that it can result in an overdraft on your bank account if you don't have enough funds to cover both payments and don't have overdraft protection. Start by contacting both your credit card company and your bank as soon as possible.

See if either side can stop one of the payments. If that's impossible, you can at least request a refund right away with the credit card company and ask your bank to waive the overdraft fee. There's no guarantee, but banks may waive overdraft fees in situations like these. Overpaying your credit card doesn't impact your credit score. A potential misconception is that overpaying your credit card can improve your credit utilization.

Your credit utilization is the percentage of your available credit that you use, and a lower percentage is better for your credit score.

That's not how it works, though. Credit card companies can't report that a card has a negative balance. There's no way to boost your credit score by overpaying your credit card bill. 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. 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. You'll end up with a spending credit you can either use or get as a refund.

While you won't have any problems because of an overpaid credit card, keep in mind that there's also no good reason to leave your card that way.

It doesn't help your credit score, and there are no advantages for you. If you have any doubt that you'll use the credit balance within a month, you should go ahead and get your money refunded. Chase for Business. Commercial Banking. See all. About Chase J. Credit Card Marketplace. What does a negative credit card balance mean? What is a negative credit card balance? What to do about a negative balance on a credit card If you notice you have a credit card with a negative balance, don't fret.

But there are a few simple actions you can take if that will give you peace of mind: Contact customer service: If you're not sure why you have a negative balance, contact your credit card issuer for an explanation. Request a deposit: Check with your credit card issuer to see if you can request the negative balance amount to be deposited to your bank account.

You can also ask for a check, money order or cash. Make a purchase: This is the easiest way to resolve a negative balance. Reasons why you might have a negative credit card balance A negative credit card balance can happen for several reasons, a few of the most common are listed below: You got a refund: If you received a refund for a purchase but had already paid off your monthly balance, your balance will be negative You earned a statement credit: If you redeem credit card rewards for a statement credit, you could get a credit that exceeds your current balance.

You may have paid off your balance in full without considering a potential credit. You overpaid your statement balance: If you accidentally overpay your statement balance, your balance will end up in the negative.

The situation could also arise if you are refunded some money for a returned purchase, for instance, and also made the full payment on your bill. Luckily, there are ways to get this overpayment back.

If you have an excess, or negative, balance on your card, the Truth in Lending Act offers ways for your card issuer to address the situation. See related: Is it legal for a bank to place a hold on my card payment? This sounds simple enough. Any new charges, up to the amount you overpaid, will be covered.

When they called asking for a refund, the customer service agent assured them that they should get a check in seven to 10 business days. When they followed up, BBVA said the money had been credited to their checking account electronically through an intermediary, considering that was the way BBVA received the money. BBVA advised the customer to follow up with their bank. The representative also mentioned that this happens all the time.

According to the CFPB database, this complaint was ultimately resolved with an explanation to the complaining consumer. What happens if you paid your card balance in full, rather than just the minimum amount due, and have second thoughts about it? That does not fall under the Truth in Lending Act legal protection for an overpayment. Issuers Bank of America, Discover and American Express did not respond to queries asking about how they are handling such situations today.

Talk to your issuer and see if it will refund you any money you paid over the minimum payment due. And if you need the money to make other payments and find that paying interest on the balance you carry is less expensive than raising the money from other sources, this could work in your favor too.

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. Once you verify your identity as the primary cardholder and explain the error, your card should be reactivated or your account restored.

When you overpay, any amount over the balance due will show up as a negative balance on your account. Negative balances are simply reported as zero balances on your credit report and will not affect your credit utilization. Interest applies only to balances you owe. If you are carrying a negative balance, it will not grow if you leave it on your account; it will only decrease as you spend it.

Once you spend the negative balance, your available credit will return to its standard limit. Here are each of the steps you may consider.

Generally, your overpayment will appear as a credit in the form of a negative balance on your account. This negative balance will roll over towards any new charges you make or outstanding balances for the next month. But if you continue making purchases with your card like normal, your overpayment should be resolved without any further action.

If you would prefer to have your money returned by your issuer, you can make a written request for a refund. Some issuers also allow refund requests by phone or through your online account.

Federal regulation requires creditors to follow up within seven business days of receiving the request. Your refund may come in the form of cash, check, money order or direct deposit to a registered bank account.

One way to avoid overpaying in the future is by enabling autopay on your credit card bill. This feature will set up an automatic payment from an account of your choice to pay your bill. Also, remember to check your account balance and payment schedule regularly. Staying aware of your account activity can help you avoid overpaying if you plan to make an extra payment during a billing cycle and reduce the risk of late or missed payments.

How We Make Money. Raychelle Heath. Written by.