What happens if you overpay your credit card bill?


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Paying a credit card bill is usually a straightforward process. You log into your online account, choose whether you will pay the minimum, the statement balance, or some other amount, and submit the payment. You can also use automatic payments to make this even more convenient for you.

There are, however, situations where consumers end up overpaying for their credit cards. Since overpayment situations like these are not common, it is natural to wonder what will happen to the money.

Here’s everything you need to know about overpaying a credit card bill, from how it happens to how you can get your money back.

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What happens if you overpay your credit card bill?

If you overpay your credit card bill, the excess amount will stay on the card as an expense credit, also known as a credit balance, which you can use. Most card issuers report the credit amount as a negative balance on the card.

Let’s say you have a balance of $ 500 on your credit card. You accidentally make two payments of $ 500. The first payment brings your balance to $ 0 and the second to minus $ 500.

While a negative balance on your credit card bill might seem odd, there’s no need to worry. Any charges you make will be deducted from the overpayment amount. Continuing the example above, if you made a $ 100 purchase with your card, it would result in a new balance of minus $ 400.

If you do not use the card for six months, the card issuer is legally obligated to repay the overpayment.

How to overpay a credit card?

Overpayment of a credit card usually happens for one of the following reasons:

  • Receive a refund after paying the credit card bill
  • Make duplicate manual payments
  • Make an automatic and manual payment
  • Provide an incorrect payment amount

Receive a refund

When you receive a refund for a purchase you paid for with your credit card, the refunded amount is returned to the card. This may result in an overpayment if you have already paid for the purchase.

For example, you make a purchase for $ 100 on the 5th of the month and pay your credit card bill on the 15th. The purchase doesn’t work, so you get a refund on the 20th. That $ 100 payment would flow back to your card and would result in a credit balance.

Make duplicate manual payments

It is possible to send duplicate manual payments to your credit card. If you are wondering how someone can make this mistake, the reason is the delay between when you send a payment and when it is processed.

It may take a few days for credit card payments to be processed. During this processing time, your online account may not reflect the payment. If you send a payment on the 1st and check your account again on the 2nd, the balance could be the same.

For those of us who sometimes forget, it’s easy to mistakenly send a duplicate payment this way. One way to avoid this is to set up automatic payments, which is also a good way to ensure that you don’t miss a credit card payment. Another is to check your most recent payment confirmation emails before making any new manual payments.

Make both automatic and manual payment

Automatic payments will generally not be made if you have already paid your credit card bill. But again, this lag during payment processing could result in an overpayment.

If you make a manual payment a few days before scheduling an automatic payment, the manual payment may not be processed in time to stop the automatic payment.

Provide an incorrect payment amount

An error on a payment amount can happen whether you pay your bill online or by check.

When paying a credit card bill online, you have the option to enter a custom payment amount. If you go this route and enter more than your card balance, either by mistake or because you don’t fully understand your credit card statement, you’ll overpay your bill.

The same is true if you pay by check and enter the wrong amount.

What can you do if you overpay your credit card?

Your two best options after overpaying a credit card are to use the credit balance or request a refund.

If it’s not a large overpayment, you might just want to use it while continuing to make purchases with the card. This is the easiest option and it works well with the credit cards you use often.

If you paid a little too much or don’t use the card much, you should request a refund. You can do this by calling the number on the back of your credit card. The card issuer will refund the payment account or send you a check. It shouldn’t take more than seven to ten business days, and it often gets done much faster.

The only thing you shouldn’t do is keep a negative balance on your credit card. There is no benefit in letting a credit card company hold money that could earn you interest in a bank account.

What about overdraft fees?

The biggest problem 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 you don’t have any money. overdraft protection.

Start by contacting your credit card company and your bank as soon as possible. See if either party can stop one of the payments. If this is not possible, you can at least immediately request a refund from the credit card company and ask your bank to waive the overdraft fee. There is no guarantee, but banks can waive overdraft fees in situations like these.

Does Paying Too Much On Your Credit Card Affect Your Credit Score?

Overpaying your credit card has no impact on your credit score. For credit scoring purposes, it makes no difference whether the card has a balance of $ 0 or an overpayment credit.

A potential misconception is that paying too much for your credit card can improve your use of credit. Your credit usage is the percentage of your available credit that you are using, and a lower percentage is better for your credit score.

This is not how it works, however. Credit card companies cannot report that a card has a negative balance. Instead, they should report it as a balance of $ 0. There is no way to increase your credit score by overpaying your credit card bill.

If you want to improve your credit score, try opening a new credit card instead. Increasing the credit limit will lower your overall credit usage rate and improve your score.

A minor inconvenience that is easily resolved

There are a number of ways that a credit card overpayment can happen, but luckily, unlike more serious credit card errors, it’s normally not a big deal. You’ll end up with an expense credit that you can use or get as a reimbursement.

While you won’t have any problems with an overpaid credit card, keep in mind that there is also no good reason to leave your card that way. It does not help your credit score and there is no benefit to you. If you have any doubts that you’ll be using up the credit balance within a month, you should go ahead and get your money refunded.


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