What to do if you have a negative points balance

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Whether you’re a points and miles newbie or earning for years, you likely know how many points or miles you have across your accounts. If you’re like me, it’s probably one of the first things you check in the morning, especially after a weekend of dining out or making other purchases.

Having a negative balance on your credit card statement is pretty common. It can happen when you purchase something and return it. It can also occur if you overpay your credit card. During the coronavirus pandemic, lots of people are noticing negative statement balances due to canceled flights and hotels.

But what about when you have a negative points balance on your account? What does it mean, and what should you do to fix it? I reached out to all of the major U.S. credit card issuers and checked their terms and conditions. Here’s what you should know.

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Why would you have a negative point balance?

As I mentioned above, it’s pretty easy to have a negative balance on your credit card statement, especially if you’ve had to return purchases or cancel trips. But it gets a little more tricky when you have a negative rewards balance. Here’s an example.

Let’s say you buy a round-trip, business class flight to Frankfurt in cash. The points you earned by paying for that flight using a credit card become available in your account, which you then use to book a hotel.

But let’s say you needed to cancel the business class ticket -- or the airline cancels on you. Unfortunately, you don’t get to keep those points. When purchases are canceled or returned, points are deducted from the account. If you had enough points to cover the hotel booking before the reversal, you’d be fine. But if you didn’t, it could result in a negative points balance.

What to do if your points balance is negative

The card issuers don’t say in the terms and conditions what a cardholder should do if they find their points balance has gone negative. But it’s clear that you’ll have to spend on your card to make up for those lost points.

If you don’t have large purchases coming up, reversing your negative points balance could be a challenging task to accomplish, especially if you don’t have any travel coming up soon due to the pandemic.

If you do have travel coming up, you may want to put all of your spending on the card associated with the negative balance. This could be even more helpful if it’s a rewards card where you’re earning extra points on travel purchases, like flights, hotels and car rentals. You could also cover meals for your friends or family and have them reimburse you.

Perhaps you might charge large purchases like rent or your mortgage to your credit card. Note that you’ll likely pay a fee when you use a credit card to pay your mortgage or rent due to interchange fees. My old landlord had a 3.95% surcharge for paying rent using an Amex card, and a 2.95% surcharge using any other credit card. So make sure paying fees like this is worthwhile before going with this option.

Amex’s terms and conditions state that any points you earn will be applied first to the negative balance first. You will not have points available to redeem until your point balance becomes positive. Amex didn't respond to a request for comment.

Citi’s position on negative points balances is a bit clearer. If you do return items that you’ve purchased using a card that earns ThankYou points, points you earn after that will be used to bring your balance to zero. That means if you know you might have a negative balance as a result of returned purchases or canceled travel, you may want to spend more to avoid going negative. Citi didn't respond to a request for comment.

Chase’s position is similar. If you hold a Chase credit card like the Chase Sapphire Reserve, Chase Sapphire Preferred Card or Chase Ink Business Preferred Credit Card, you’ll need to spend on your credit card to counteract the negative balance before you can earn more points.

“If this situation were to happen, it would cure itself as the customer spends on their card … [and] a cardmember cannot spend more points than what are available,” according to the rep.

Bottom line

If you know you’ll have to return a large purchase, you may want to hold off on making a redemption like transferring points to travel partners until your account is settled. And if your balance does go negative, you’ll want to take steps to remedy the situation. Otherwise, you may be in for a shock the next time you open your account.