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Looking at your credit card statement and asking why my credit card outstanding balance is negative?
A negative balance on your credit card means that the credit card issuer owes you money.
Common Causes can be overpayment, refunds and credit adjustments.
You can utilise the negative balance to offset future purchases, effectively pre-paying them until the balance is exhausted.
If preferred, you contact the bank to refund the negative amount, which can then be used elsewhere.
Regularly review credit card statements and transaction history to ensure all entries are correct and to maintain oversight over your financial activities.
You may be checking your credit card statement and asking why my credit card outstanding balance is negative. It can be a surprising sight.
This article explains what a negative credit card balance means in Malaysia, why it might occur, and how to manage it effectively.
What Does a Negative Outstanding Balance on Your Credit Card Mean?
Encountering a negative balance on your credit card statement indicates that the bank owes you money rather than you owe the bank. It implies that you’ve overpaid or received credit.
Rather than requesting a refund, you can simply continue using your credit card for future purchases.
The negative amount will automatically be applied to reduce subsequent charges, effectively giving you a pre-paid credit until the balance returns to zero.
For instance, with a -RM50 balance, your next purchase of RM50 would not incur any immediate out-of-pocket expense.
Why Is Your Credit Card Outstanding Balance Negative?
This unusual credit situation can occur under several circumstances:
1. Overpayment
Sometimes, you might pay more than the total due on your credit card either by manual error or through automatic payment setups.
This results in a surplus amount being credited back to your account.
2. Refunds
Moreover, if you return a purchase or cancel a service for which you had previously paid using your credit card, the refunded amount could exceed any existing balance on your card.
For example, if you return a high-value item after paying off your monthly bill, it can push your account into a negative outstanding balance.
3. Credit Adjustments
Furthermore, credit adjustments can contribute to a negative balance, such as:
Errors in billing
Successful dispute resolutions that favour the cardholder
Rewards such as cashback credited directly to the account
These adjustments are often retroactively applied, which might surprise you when you check your account balance.
How to Use A Negative Balance in Malaysia
1. Use the Surplus
Start by utilising the negative balance for future purchases. This is the most straightforward approach.
This not only simplifies your financial management but also uses the credit without needing any additional steps.
2. Request a Refund
However, if you prefer to have the extra funds available for use elsewhere rather than tied up in your credit card account, you can request a refund.
Most banks will accommodate this request and transfer the owed amount back to your bank account or issue a check.
3. Monitoring and Managing Your Account
Additionally, keeping a close eye on your credit card activity is essential, especially when dealing with negative balances. It is to ensure that all transactions are correctly recorded:
a. Monitor Account Activity
Firstly, it is vital to regularly review your credit card statements and online transaction history.
This helps confirm that all credits and charges are accurately reflected and allows you to spot any unusual activity quickly.
b. Communicate with the Issuer
Next, if you notice persistent negative balances or if any discrepancies arise, it is crucial to contact your credit card issuer’s customer service
They can offer comprehensive explanations and take corrective actions if necessary.
Customer service can also guide you through requesting a refund of the negative balance or advise on any other concerns you might have regarding your account.
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