It’s easy to accidentally overpay your credit card. You might pay twice by mistake, or have autopay on but still make a payment manually. Whatever the reason, overpayment results in a negative balance on your card — and you have a couple of options for your next move.
CNBC Select explains what you can do if you overpay your credit card, the consequences and how to avoid a negative balance.
Overpaying your credit card
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What to do if you overpay your credit card
If you find yourself with a negative credit card balance, you typically have two ways to deal with it:
- Wait it out. There’s no penalty for overpaying your credit card. If the negative balance isn’t significant and you use the card regularly, you can spend the statement credit on purchases. Once you’ve spent it, you’ll be using your regular credit line again.
- Request a refund. If you overpaid by a large amount, you might want to get the money back. The process of requesting a refund for overpayment varies by issuer, but you can typically complete it online. When the issuer receives your request, they have seven business days to send you the funds.
Even if you don’t ask for a refund, the issuer will attempt to give you one if there’s any remaining negative balance on your card for more than six months.
Does overpaying your credit card affect your credit?
Fortunately, overpaying your credit card won’t hurt your credit score.
Carrying a balance on your credit card affects your credit utilization ratio — or how much of your credit line you’re using. If you’re using more than 30%, your credit score can take a hit.
A negative balance on your card obviously won’t increase your credit utilization ratio, but it won’t help it either. Even if you had a negative balance of a million dollars on your card (to use an extreme example), your utilization can’t get lower than 0%, so there’s no benefit to carrying a negative balance.
Many experts recommend maintaining a credit utilization ratio of around 10% as this shows credit card companies that you are responsible with your credit.
Overpaying your card still exposes you to risk
Most of the time, a negative credit card balance won’t cause any issues. However, if the amount is significant, your credit card issuer might suspect fraud. A large overpayment can be a sign of money laundering or someone attempting to get refunds for stolen items.
In this case, your credit card company could freeze your account. Fortunately, you typically can clear this up by getting in touch with the issuer.
How to avoid a negative credit card balance
Overpaying a credit card can be an inconvenience. If you want to avoid any errors in paying your card bills, there are a few strategies you can try.
Check for recent payments
Some credit card issuers make it easy to see if you’ve recently made a payment. If you have a card such as the Chase Sapphire Preferred® Card, tracking your payments should be simple. While Chase typically doesn’t update your current balance right away, it displays the most recently schedule payment in the card details when you check the app. You can also tap “View payment activity” under the card details to see all your recent payments and whether they have gone through.
Chase Sapphire Preferred® Card
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Rewards
Enjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases, and $50 annual Chase Travel Hotel Credit, plus more.
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Welcome bonus
Get up to $1,050 in Chase TravelSM value. Earn 60,000 bonus points after $4,000 in purchases in your first 3 months from account opening. That’s worth $750 when redeemed through Chase Travel. Plus, get up to $300 in statement credits on Chase Travel purchases within your first year.
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Annual fee
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Intro APR
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Regular APR
20.99% – 27.99% variable on purchases and balance transfers
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Balance transfer fee
Either $5 or 5% of the amount of each transfer, whichever is greater
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Foreign transaction fee
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Credit needed
With a credit card like the Capital One Venture X Rewards Credit Card, all you need to do is check the issuer’s app. Capital One shows your scheduled payments on top of the recent transactions section and often updates your available credit almost immediately after you make a payment.
Capital One Venture X Rewards Credit Card
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Rewards
Unlimited 2X miles on all eligible purchases, and 5 Miles per dollar on flights and vacation rentals and 10 Miles per dollar on hotels and rental cars when booked via Capital One Travel portal
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Welcome bonus
Earn 75,000 bonus miles once you spend $4,000 on purchases within the first 3 months from account opening
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Annual fee
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Intro APR
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Regular APR
19.99% – 29.99% variable APR
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Balance transfer fee
$0 at the Transfer APR, 4% of the amount of each transferred balance that posts to your account at a promotional APR that Capital One may offer to you
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Foreign transaction fees
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Credit needed
If your issuer doesn’t make this information as easy to find, you can always go and check your transactions as your payment will also be displayed here.
Set up autopay
Perhaps the easiest way to avoid overpayment is to “set it and forget it” by signing up for autopay. With this feature, payments will be made automatically and you can opt to pay the entire balance each month. Just don’t forget you have it in place or you risk ending up with a negative balance by scheduling an extra payment manually.
For example, if you have the Citi Simplicity® Card, you can set up autopay by linking your bank account through the Citi website or mobile app. You can customize the payment type (i.e. last statement balance or minimum payment due), how often you’d like to pay per billing cycle and what date(s) you’d like your payments to be made. Plus, the card doesn’t charge any late fees, so you won’t be charged for it if you miss a payment.
Citi Simplicity® Card
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Rewards
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Welcome bonus
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Annual fee
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Intro APR
0% Intro APR for 21 months on balance transfers from date of first transfer and 0% Intro APR for 12 months on purchases from date of account opening.
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Regular APR
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Balance transfer fee
There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
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Foreign transaction fee
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Credit needed
Sign up for account alerts
Autopay isn’t for everyone. If you’d rather control how much you pay and when you make the payment, it’s up to you to monitor your credit card balances and due dates. Luckily, your issuer can still help you with that task if you set up account alerts. You’ll get credit card notifications about your balance, payments due and more, depending on what you opt into. Usually, you can set up alerts online or through the credit card app when you sign in to your account.
If you want additional alerts, consider a credit monitoring or identity protection service. Aura offers a long list of security features, including credit monitoring, which alerts you of unusual transactions, new credit inquiries and suspicious changes to your finances.
Aura
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Cost
Individual plan: $10/month billed annually or $13/month billed monthly; Couple plan: $18/month billed annually or $24/month billed monthly; Family plan: $29/month billed annually or $39/month billed monthly
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Standout features
Protects against financial fraud, identity theft, spam calls, online theft, phishing and scam websites, viruses and malware, as well as offering security tailored to kids and financial alerts like credit score monitoring
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Availability
Offered in both the App Store (for iOS) and on Google Play (for Android)
Put any extra money in a savings account
Just because you may have the funds to pay off credit card spending immediately doesn’t mean it’s the best choice. Lenders want to see responsible credit usage and you may be leaving money on the table by paying your balance too quickly.
Since you have until the due date to pay off your balance, consider keeping your extra money in a high-yield savings account and taking it out for expenses when needed.
With the LendingClub LevelUp Savings Account, you can earn a strong APY and enjoy no monthly account fees. Plus, you can make free outgoing transfers which is a plus when paying bills or moving money around.
LendingClub LevelUp Savings Account
LendingClub Bank, N.A., Member FDIC
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Annual Percentage Yield (APY)
5.15% (with monthly deposits of at least $250), or 4.30%
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Minimum balance
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Monthly fee
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Maximum transactions
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Excessive transactions fee
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Overdraft fees
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Offer checking account?
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Offer ATM card?
FAQs
Can you overpay your credit card to increase your credit limit?
No, overpaying your credit card will not increase your credit limit. One of the most common ways to do that is by requesting a credit line increase through your credit card provider.
Does it hurt your credit score to overpay your credit card?
No, it doesn’t hurt your credit score to overpay your credit card, but you might miss out on positive gains reaped by a responsible credit utilization rate.
Is it okay to pay your credit card multiple times?
There’s no harm in making multiple payments to your credit card as long as you pay off your total balance by the due date.
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