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Overpaying your credit card can happen by accident or because you receive a refund or statement credit after you've already paid your full balance. The result is a negative balance, but it won't hurt your credit scores, and the overpayment can be refunded or used toward future purchases.
What to Do if You Overpay Your Credit Card
Overpaying your credit card results in a credit balance, which means your credit card issuer owes you money. For example, if your balance is $500 and you accidentally make a payment of $600, your account will show a -$100 balance, or a $100 credit balance.
Some card issuers may automatically return an overpayment without ever applying it to your account. If the overpayment is processed and you end up with a credit balance, you have several options for handling the negative balance.
Ask for a Refund
You can request a refund of the overpayment by calling customer service or sending a written request to address on your credit card statement. If you don't request a refund, card issuers are legally required to refund credit balances over $1 within six months.
Use the Credit Balance
Continue using your card as you normally would. Each new purchase reduces your credit balance until it's used up.
Some card issuers may also apply the overpayment to other balances you owe on the same account. For example, if you overpay your purchases balance, the excess may be applied to installment plan balances.
Avoid Additional Payments
You generally won't owe another payment until the credit balance has been used up or refunded. Making another payment before then could further increase your credit balance.
Does an Overpaid Credit Card Hurt Your Credit Score?
A negative credit card balance doesn't hurt your credit scores; in fact, it could help them. Overpaying your balance can lower your credit utilization ratio—the amount of available credit you're using. Credit utilization is an important credit scoring factor, and a lower utilization is better for scores.
That said, if you repeatedly make large overpayments, it could trigger an account review by your credit card issuer. While your account is under review, your card issuer could place a temporary hold on your account, lower your credit limit or even close your account.
How Does a Credit Card Overpayment Happen?
Overpaying your credit card isn't always intentional. It can often happen when certain credits or reversals hit your account after you've already paid your balance in full.
- Accidental double payment: You could accidentally pay twice if you forget that you paid or the payment takes longer to process than you expected. A quick call to customer service can help you verify recently processed or pending payments.
- Typing errors: You can accidentally overpay your credit card if you make a typo when you're setting up the payment. Double-check your payment amount before submitting to avoid paying more than you intend.
- Delayed refunds: Because it can take several days for credit card refunds to process, returning a purchase could cause a negative balance. Consider taking a store credit instead if you want to avoid a credit balance on your credit card.
- Statement credit: Cashing in rewards for a statement credit after paying your balance can leave you with a credit on your account. Opting for a direct deposit or strategically redeeming rewards for recent purchases, like a flight or hotel stay, can prevent a negative balance.
- Waived fees: Your balance could be negative if your card issuer credits fees back to you after you've already paid your full balance.
Learn more: Mistakes to Avoid When Using a Credit Card
Can You Overpay Your Credit Card to Increase Your Credit Limit?
No. Overpaying your credit card doesn't increase your credit limit. While a credit balance can temporarily increase how much you can spend, your actual credit limit remains the same.
Tip: Some card issuers will automatically raise your credit limit periodically based on your income, credit and account history. You can also request a credit limit increase if it's been several months since your last increase.
Learn more: How to Request a Credit Limit Increase
How to Avoid a Credit Card Overpayment
It's easy to accidentally overpay a credit card. Here's how you can avoid it.
- Enable account alerts. Balance alerts, payment reminders and payment confirmations can help you keep track of your account activity and avoid accidental duplicate payments.
- Check your statement carefully. Review your statement to verify your transactions and balance before making a payment. Dispute billing errors instead of paying them so they can be properly investigated and removed.
- Set up automatic payments. Automatic payments can ensure you pay the correct amount each month. If you also make manual payments, remember to adjust or cancel the scheduled payment to avoid accidental double payments.
The Bottom Line
Overpaying usually isn't something to worry about. The extra money is simply a credit balance that you can spend or request as a refund. If you frequently need more available credit than you currently have, consider requesting a credit limit increase or applying for a new credit card instead of overpaying your account.