You may feel frustrated at the situation, and rightfully so. Fortunately, there are some relatively simple steps you can follow to use the overpayment or have it refunded.
How Overpayments Happen
A number of things can lead to an overpaid credit card. You might accidentally enter the wrong payment amount. Or, you might forget your account is on autopay and send a manual payment, doubling your payments for the month. Receiving a refund or statement credit after you’ve already paid off your balance can also result in a negative balance. For example, if you receive a $200 sign-up bonus as a statement credit after you’ve paid your account in full, you’d have a -$200 balance on your account.
What To Do If You’ve Overpaid
Before taking action, verify the overpayment has been cleared by your bank and has been applied to your credit card account balance. Your card issuer might have a policy of returning any overpayment that would create a credit balance. Check also for pending transactions that could wipe out the negative balance, putting you back at, or close to, a positive balance.
Spend the Negative Balance
An overpayment on your credit card will be applied as a credit to your account and may appear as a negative balance in your online account or on your billing statement. For example, if your current balance (including interest and pending charges) is $100 and you make a $150 payment, you would have a -$50 balance. It may be easier to spend the negative balance, particularly on a credit card that you use often. New purchases will continue to reduce the negative balance, so you won’t owe anything until you’ve exhausted the overpayment and you’ve started accumulating a balance that you owe. For example, if you have a -$50 balance and make a $50 credit card purchase, your account balance will be at $0. Additional purchases will begin adding to your balance due.
Request a Refund
If your account has a credit over $1, you can write to your credit card issuer—typically at the address listed on your credit card statement—to request a refund. Include details on how you’d like the payment to be refunded, for example, via cash, check, or deposited into an account. Then, your card issuer will have seven days to send you a refund after receiving your request. Your card issuer may offer refund requests online or over the phone and may honor a request even if you’re only an authorized user on the account. At a minimum, you can call your credit card issuer to ask about refund options and then follow up with a written letter outlining your request.
Wait for a Refund
Your card issuer doesn’t have to wait to receive a letter from you to take action. It can optionally automatically issue you a refund right away, after receiving an email or phone request from you, or anytime within the next six months. However, if you still have an outstanding negative balance after six months, the card issuer is required to make a good-faith effort to refund your overpayment without any action from you.
How To Avoid Overpayments
While credit card overpayments are usually pretty simple to clear up, they can still affect your cash flow, leaving you in financial limbo until you get things sorted out. Avoiding overpayments can save you the hassle of dealing with the aftermath.
You may be able to cancel a pending overpayment if you catch it before it processes.Sign up for autopay and use alerts to let you know the payment date is approaching.Confirm your balance due, including pending transactions, online before making a payment.
