Is a negative credit balance bad?While a negative balance may seem like a bad thing for your credit score, it's actually a neutral situation. Negative balances don't really help or hurt your credit score. That's because credit scoring models consider negative balances as if you have a $0 balance.
Does a negative balance mean they owe you?Having a negative credit card balance on your account means that you are owed money from your credit card company (unlike a positive balance, which means you owe money). Another way to look at it is that you paid more than the total balance that was due and are owed a credit to your account.
Does a negative balance help credit score?In fact, a negative balance could actually help you improve your credit scores. For example, a negative balance could potentially affect your credit utilization—a measure of how much of your available credit you're using. Experts recommend using no more than 30% of your available credit.
What happens if I have a negative balance on my debit card?Banks are entitled to charge an overdraft fee for each transaction that results in a negative balance. These can add up quickly, especially if you're using your debit card for multiple small transactions in a short span of time. The typical overdraft fee charged by banks is between $30 and $35.
|