If you make a purchase on a credit card and pay the card off, what would happen if you were issued a refund later?

Can you get a refund on a credit card with no balance?

If your credit card is paid off, has a zero balance, and you receive a refund on a purchase made before settling the balance, you will have a negative balance on your credit card. Following this, any purchases that you make in the future will be applied to the balance first.

So, if you want to know more about credit card refunds and what would happen if you get a refund on a credit card with a zero balance, we will unpack all of the details you need to know.

Can You Get a Refund On a Credit Card With Zero Balance?

What Is A Credit Card Refund?

If you make a purchase on your credit card and request a refund due to non-delivery of goods or services (or any other reason), you can request a refund.

However, you will not receive a cash refund. Instead, you will receive a refund in the form of a credit to your credit account.

So, let’s say you spend $100 online for an item delivered to your door, and your credit card will reflect a balance of $100, which you will be charged interest on and have to settle.

If you receive a refund, the seller/merchant will be debited that $100, and it will be returned to your account as a credit, bringing your balance back down to zero.

However, your refund will not include reimbursement of any interest you have incurred before receiving the refund. But what happens if you’ve already paid the balance on your credit card?

How Card Issuers Refund A Credit Card With Zero Balance

If you’ve disputed a charge on your credit card for whatever reason but have already paid the outstanding balance, the card issuer or bank will give you a refund in the form of a credit or negative balance on your credit card.

Therefore, if you purchase in the future, it will be deducted from that credit before you incur any further costs on your credit card.

So, if you’re refunded $100 and make a $120 purchase later, your credit card balance will be $20, for example.

However, you will not receive any interest in your negative balance. And in addition to this, some credit card issuers will have different refund policies on credit cards with zero balance.

In some cases, the card issuer or bank will send your negative balance to you in a check, and in other cases, they may credit you with the amount on a current or savings account.

Has your credit card landed you in debt? Find out how to dig yourself out with our 14 steps to Financial Freedom.

How Long Does A Credit Card Refund Take?

One of the reasons you may be getting a refund on a credit card with zero balance is that there could have been a lengthy delay.

Refunding a transaction has to go through the credit card networks and take several days to reflect on your account.

The time it takes to refund you for a disputed purchase can take anywhere between five and 14 business days.

The refund also has to be approved by the merchant in this process. However, if you want an immediate refund, you should ask the merchant for store credit to make another purchase if that’s preferable to you.

This is how you could end up in a situation where you’ve settled the balance on your credit card, and the refund only comes through later, which would result in a negative credit card balance, as detailed above.

How Long Does A Negative Balance On A Credit Card Remain On Your Account?

In most cases, the negative balance on your credit card will remain until you have spent the outstanding balance on future purchases.

However, you need to refer to your bank’s policies and the terms and conditions of your credit card agreement. In some cases, that balance may be a return to zero after a 60-90 day billing cycle.

The bank may return the outstanding balance to you in cash or through a different method. Contact your bank or card issuer to enquire about the billing cycle and how the refund process will be conducted.

Does A Negative Balance On A Credit Card Affect Your Credit Score?

One of the things that anyone with a negative credit card balance may be concerned about is what this means for your credit score.

However, you have nothing to worry about because most credit models consider a negative balance equivalent to a zero balance, and your credit balance will therefore not affect your credit score.

What’s The Difference Between A Refund and A Chargeback?

A credit card refund is when the purchase amount is credited back to your account after you make a purchase.

while a chargeback is when the original payment has been reversed – and a chargeback will only occur after filing a billing dispute (which must occur within 60 days of the original purchase).

The chargeback, however, will be issued by the merchant and not the bank. And the bank must settle the chargeback within 90 to 150 days to reverse the process.


So, if you’re concerned about receiving a refund on a credit card with a zero balance, there’s nothing to worry about; it just means that you’ll have some extra money to spend.

You can even request to receive the money-back in cash or as a credit on your other bank accounts.

Furthermore, when you’re issued a refund on a credit card with zero balance, it will not affect your credit score.




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