Here’s what to do if you have a negative balance on your credit cards

May 7, 2020

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Reader Questions are answered twice a week by TPG Senior Points & Miles Contributor Ethan Steinberg.

Credit card balances tend to only move in one direction. The more you spend the higher they get, until you pay your bill and the number goes back to zero. However, with many people around the world canceling upcoming travel plans that they’ve already paid for due to the coronavirus, you may find yourself with a negative balance on your cards. TPG reader David wants to know what to do about that …

I had a trip planned to Bali this June that I paid for using my Amex Platinum. Because of COVID-19 I had to cancel, and when the airlines refunded my tickets I ended up with a negative balance on my Platinum card. Is there anything I can do to get this money back or is it stuck there?

TPG READER DAVID

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First off, let’s back up and explore how David ended up in this situation. For the sake of convenience let’s just say that his entire trip cost exactly $1,000. Months ago, when David was planning, he would’ve booked flights using The Platinum Card® from American Express as he mentioned, and then paid off the balance in full. This would’ve left him with a $0 balance on his card and fully paid-for plane tickets. Now that the trip has been canceled and refunded, his card would actually have a negative balance.

If you find yourself in this situation (like I have on three different cards recently), you have two choices. The easiest option is to just leave everything as is and continue spending on that card. In David’s example, he could charge $1,000 worth of groceries, gas or really anything to his Platinum card and he wouldn’t owe any additional money since it would just come out of the negative balance. This works best if you have a card like the Chase Sapphire Reserve with strong and diverse bonus categories, and especially ones like dining that are still useful during the current pandemic, and you might not want to spend $1,000 on an Amex Platinum since the card only earns 1x point per dollar outside of its limited 5x airfare when booked directly with the airline and through Amex Travel (on up to $500,000 on these purchases per calendar year, starting Jan. 1, 2021) and on prepaid hotel bookings via Amex Travel.

Related: The best credit cards for everyday spending

Thankfully, when I called both Chase and Amex to inquire about this issue over the last few months, the customer service agents were happy to deposit that balance directly to my linked bank account and in all three cases the money showed up in just one or two business days. This is a much better option — not only does it give you more liquidity at a time of economic uncertainty, but it allows you to then put your future expenses on the cards that earn the most bonus points. Not every bank is this generous, and I can only speak to my personal experience with Chase and Amex.

Some banks may insist on sending you a check via snail mail which can be frustrating if you want or need the money sooner, and some might not allow it at all. In that case, you’d probably want to use the card in question for most of your upcoming purchases until you’d used up the negative balance. “Free” money, especially right now, is probably worth more than a few extra bonus points.

Bottom line

David’s first move should be to call Amex and ask them to credit the negative balance back to his linked bank account. I’ve done this twice in recent weeks, and the process took less than 48 hours each time. If your bank isn’t as generous, you can continue charging new purchases to the card until you use up the negative balance.

Thanks for the question, David, and if you’re a TPG reader who’d like us to answer a question of your own, tweet us @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.

Featured photo by Isabelle Raphael/The Points Guy.

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