How To Get Your Credit Balance Refund — A 3-Step Guide

A credit balance refund happens when you have a negative credit card balance — meaning the bank owes you cash back!

graphic illustration of golden coinn and orange credit card

How do you qualify for a credit balance refund? Great question — it all comes to down to having an overpayment on your credit card bill. Here’s a few ways this can happen:

  • You buy something, pay your bill, and later return the item for a refund.
  • You set up AutoPay to pay out each month, but mistakenly overpay with a second bill payment.
  • You paid your bill from the last cycle but discovered fraud and your bank credited you back.

No matter how it happens, the fact is that you overpaid and your credit card company owes you a refund. Knowing when you’re eligible for a credit balance refund, how to request one, and your cardholder rights will help you get back your money and make you more savvy with your personal banking. Let’s dive into how the refund process works and what steps you need to take to get your refund.

Key Takeaways

  • People can incur overages on their credit accounts in a number of ways but most commonly through overpaying their bills.
  • Card issuers must refund their customers with negative balances by request or if the balance stays on the customer’s account more than six months.
  • Refunds are commonly received as a cash credit, money order, check, or statement credit.
  • You can avoid overpaying by tracking your bill payment schedule and reviewing your transactions.

What are Credit Balances?

Any form of debt is considered credit. A credit account can take the form of a credit card, loan, mortgage, etc. When you have a positive balance you owe money on a credit account. But when you have a negative credit balance, the card issuer owes you.

Note that credit balance refunds usually occur with credit cards but apply to other forms of credit such as mortgages or personal loans. We will cover the process for credit cards here but the same ideas apply for other credit accounts.

Negative Credit Card Balance

Having a negative credit card balance means you overpaid. While a negative balance does not help or hurt your credit score, a card issuer will not want to hold onto those funds for long.

Your Right to Receive A Refund

                                                                Shora Simazaki | Pexels

The Consumer Finance Protection Bureau (CFPB), the United States government agency charged with protecting consumer finance has a number of rules that banks must follow on credit balance refund requests — as long as the amount is more than $1. A card issuer can:

  • refund balance amount into the cardholder’s deposit account (e.g. checking or savings account)
  • fulfill a customer’s written request for a refund of a portion or of the whole amount owed
  • if the negative balance remains in the credit account for more than 6 months, the card issuer must try to send the customer the refund amount through money order, check, cash, or account deposit.

Here’s how you can request and receive your refund.

Getting Your Credit Balance Refund

Credit Balance Refund Process
Credit Balance Refund Process

#1 – Verifying That You Have a Negative Balance on the Bank’s Site

Log onto your card issuer’s portal and check that the extra payment has cleared into the card issuer’s system or what the other cause may be. Look at your current balance to see if it’s negative and if you have any pending transactions. Once you know you are owed a refund, here’s how you can get it.

#2 – Deciding How To Get Your Credit Balance Refund

You have a range of choices on how to apply your remaining credit balance. Use your bank’s online resources or call them to learn about your refund options. You can:

Request A Refund – Cash Deposit, Statement Credit, or Check

Then, tell the bank how you want to get your refund. The easiest way is to get it as a cash credit directly deposited into your checking account, which would take a few business days to fulfill. You can also get the refund paid as a statement credit, which is perhaps the most convenient option for redemption if you don’t want cash. This is my preferred option as it saves me time and worry.

If you want to get it as a check, it may take a bit longer. For any redemption option, the bank has a limit of seven business days to comply with your request.

As mentioned above, if the bank doesn’t hear from you it must try to issue you a refund if the negative balance stays on your account for more than six months.

#3 – Receive Your Refund!

Tenor | Carlton Happy Dance

Tips to Avoid Overpaying

Overpaying on your credit card, loan, or other credit account balance impacts your bank account as you lose out on access to money that could be spent elsewhere. Here are some tips to avoid overpaying:

  • When you setup autopay for each of your credit cards, input the dates for your payments into your calendar, and enable alerts.
  • Check your credit card transactions periodically for any out-of-place events and adjust your payments as needed.
  • If you are manually paying, factor in pending transactions and your balanced owed before setting an amount.

The Bottom Line

We covered what credit balances are and how you are eligible for a refund if you have a negative credit card balance. You can use your bank’s online resources to determine your refund options and request it in the way that works best for you.

We are not financial advisors. The content on this website and our YouTube videos are for educational purposes only and merely cite our own personal opinions. In order to make the best financial decision that suits your own needs, you must conduct your own research and seek the advice of a licensed financial advisor if necessary. Know that all investments involve some form of risk and there is no guarantee that you will be successful in making, saving, or investing money; nor is there any guarantee that you won't experience any loss when investing. Always remember to make smart decisions and do your own research!

Leave a Comment