Here’s what you can do if your credit card shows a negative balance.

At first glance, seeing "negative balance" may lead you to think you've made an error, like forgetting to settle your credit card bill. In reality, a negative balance is a positive situation since it indicates that the bank owes you money instead of vice versa.

Even so, having your funds locked up in a credit card account might not be the most exciting scenario. Therefore, we’ll outline the best actions to take when faced with a negative credit card balance, detailing the different options available to you, each requiring varying levels of effort.

What causes a negative balance?

Typically, a negative balance on your credit card arises after you make a return or get a refund for a purchase.

I recently faced this situation when I returned an item before settling my balance on the Citi® / AAdvantage® Platinum Select® World Elite Mastercard®. Unfortunately, the return wasn't processed until after I'd paid my statement, resulting in a negative balance of just over $100.

The details for the Citi AAdvantage Platinum Select World Elite Mastercard are independently sourced by Dinogo. The information on this page has not been verified or provided by the card issuer.

For a small issue like this, I'll simply use this card to spend about $100 to cover my negative balance. However, if your negative balance is significantly larger, such as from cancelling a major trip, exploring other solutions might be wise.

Continue using the card

This is the easiest option. Just keep making purchases with the card that has a negative balance, and your transactions will eventually bring the balance back to zero or into the positive. With this method, you typically won’t need to reach out to the bank or take any unusual steps.

Transfer the negative balance to another card within your account

If you have a balance on another card in the same account, you can reach out to the bank and request a transfer of your negative balance to a card with an outstanding balance. This method requires a bit of effort, but it allows you to focus your future spending on the card that offers the most rewards instead of just using the negative balance on one specific card.

TPG credit cards managing editor Matt Moffitt recently found himself with a negative balance exceeding $400 on his Platinum Card® from American Express due to a refund. He also had about $500 in positive balance on a Delta card. Instead of accumulating more charges on his Platinum Card, he utilized the American Express chat feature to request a transfer of the negative balance to his Delta balance. The agent handled this manually, and it appeared on the Delta card in less than 48 hours.

Request cash instead

If you find yourself with a considerable negative balance and don't wish to transfer it to another card, consider asking to receive that amount in cash. Many banks will provide the cash either through direct deposit or by mailing you a physical check for what they owe you.

This option does involve reaching out to the bank and possibly waiting for a check in the mail, but it can be beneficial to have the flexibility to spend that money on a different card that might offer more rewards than the one with the negative balance. Alternatively, you might simply prefer having the cash available.

In summary

Having a negative credit card balance is actually a positive situation, as it indicates that the bank owes you money. When faced with a negative balance, select the option that best suits your needs to utilize those funds and enhance your rewards.

The simplest approach is to continue spending on that specific card. Alternatively, you can request that your bank transfer the balance to another card within your account or provide you with cash via direct deposit or a mailed check.