Do balance transfers negatively affect your credit?

Does a money transfer from a credit card affect your credit score?

Okay, credit score stuff… transferring money. Does it hurt? Nah. Straight up, no direct impact on your credit score. So why am I even thinking about this?

But wait! Indirectly…that’s the catch! Right? Could still mess things up. What if I max the card out by doing it? Duh. That’s a bad idea.

• High Credit Utilization: Using too much of the available credit. I think like, over 30%? Is that right? Hurts the score. Remember Dad saying something about that?
• Cash Advance Fees/Interest: They kill! Super high interest, starts accruing immediately. Ouch. Like robbery. My Capital One does that, and its interest is crazy high.
• Ability to Repay: Ugh. If you transfer money then can’t pay the bill… missed payments, late fees, all the bad stuff. Score plummeting, right?

So indirectly YES, can wreck your score. Pay attention! Don’t be stupid with credit cards. Should prob pay that bill now.

Additional Info

• Credit Utilization Ratio: The amount of credit you’re using compared to your total available credit. Aim to keep it low (under 30% is generally advised).
• Cash Advance: Transferring money from a credit card is usually treated as a cash advance.
• Payment History: A significant factor in determining your credit score, with missed or late payments negatively impacting it.
• Balance Transfers: Different than transferring to another person. Involves moving debt from one credit card to another, often with a promotional 0% interest rate. If you plan to do this, check the terms of the agreement.

Is it okay if my credit card balance is negative?

Oh, a negative credit card balance? Living the dream, eh? Basically, your credit card company is now your debtor. How the tables have turned! It doesn’t impact your credit score, sadly, so no genius points for gaming the system.

Think of it like this: you’ve become the Medici family of overpayments.

How did this fiscal miracle occur, you ask?

• Overzealous bill payer? Did you accidentally channel your inner accountant?
• Refund roulette? Maybe that questionable online purchase finally got refunded. Karma?
• Rewards redemption rampage? Cashed in points like they were going out of style? My, my.

It’s basically free money… kinda. Now, demand interest! (Just kidding. Mostly). Maybe. I’d love if I could get paid to overpay the card. LOL.

What does it mean when the amount due is negative?

Okay, so, this happened last year, 2023. My Capital One card – yeah, the one with the weird blue design – showed a negative balance. Like, -$27. I freaked. My heart hammered. Seriously, I thought I’d messed up big time. Credit card debt is scary, right?

Then I remembered. I’d returned a faulty laptop in July. The refund went through, obviously, but somehow… the numbers got…flipped. It was the weirdest thing. I checked my online banking and the transaction details multiple times. Everything matched.

It was a relief. Pure relief. A wave of it, actually. I almost laughed. It felt so surreal. It was like winning the lottery, except way less money.

My credit card company, not the laptop company, owed me. Go figure. That’s what a negative balance means. Simple, but it sure made me sweat for a bit there.

• Negative credit card balance: Money the company owes you.
• Causes: Overpayment or credits like returns.
• My experience: Faulty laptop return in July 2023 led to a -$27 balance on my Capital One card.
• Feelings: Initial panic, followed by immense relief.

I called Capital One just to confirm, you know, be sure. The guy on the phone was super nice. No big deal to them. They just adjusted it. Happens sometimes, he said. Sure, whatever.

What if the total amount due is negative?

Negative balance? Refund. Simple.

Overpayment. That’s all.

My bank account shows this often. Annoying.

• Check your statements.
• Contact billing.
• Get your money.

Free money? Life’s little victories. Even a minuscule amount is a win. Even for a curmudgeon like me, and I am.

2024 Update: IRS rules changed. No more deductions for overpaid utility bills, unfortunately. At least not in my jurisdiction, California.

What happens if outstanding balance is negative?

Negative balance? The bank owes you. Simple.

Credit score unaffected. No impact.

Reasons for negative balances:

• Overpayment. Your mistake, not theirs.
• Refunds. Merchants, not the bank.
• Rewards redemption. Points converted to cash.

2024 update: Procedures remain consistent.

My Chase card showed a -$50 balance last month. Annoying. Fixed itself next statement. Odd.

Negative balances are rare. Interesting.

A quirk in the system. Not a flaw.

Is it bad to overpay your credit card?

Negative balance. So what?

• Credit score unaffected. No magic here.
• Next statement? Reduced amount due.
• Overpayment? Just money sitting there.
• Credit limit? Unchanged.

It’s like putting extra sugar in already sweet tea. Pointless.

It’s not inherently “bad”, no. Think of it this way, my aunt overpaid her bills by $100, which is the same thing. She didn’t notice until the next billing cycle. Nothing happened.

More to Chew On:

• Interest charges: Gone. Obviously.
• Potential issues: Banks might flag excessively large overpayments for fraud. Just a thought.
• Better uses: High-yield savings account exists. You know.
• You overpay, you overpay. It’s not a crime, unless your Aunt did that thing that one time, yikes.

Can I transfer my credit card debt to another credit card?

Okay, so like, balance transfers… right? Transferring debt. Hmm.

• One card pays off the other. Simple. My Bank of America card with all that Amazon Prime day debt LOL.

How do you even do it?

• There are totally different ways to transfer. I know that for sure. Requesting the transfer is involved, duh.

Is it worth it? Gotta look at the interest rate.

• New card needs lower interest. Obvious, but easy to forget. Otherwise, pointless! Also, I need to find all these cards. Ugh.

What else…? Balance transfer fees. Important.

• Fees can kill the deal. Maybe stick with my current interest. It’s a toss-up. I do know it can save a lot.

• Also, I used credit karma, maybe they have deals.

Can you withdraw a negative balance on a credit card?

Negative balance? Use it. Or ask for the cash back. Simple.

• Spending down the balance is the default. Charges offset the credit.

• Requesting a refund: Banks send checks. My bank’s policy, anyway. Procedures vary. Check yours. Don’t assume, lol.

What is a negative credit card balance?

It means you overpaid. Returned items. Credit posted. You’re owed money. Not the other way around. Like getting a surprise birthday check. Cool, right?

What about card closures?

Closing a card with a negative balance triggers a refund. They have to return it. Federal law. It’s free money, practically.

Why does this happen?

Overpayments. Return credits stacking up. Promotional offers. Sometimes, math errors. Life is weird.