What Happens If You Overpay Your Credit Card
Contents
If you overpay your credit card, the extra money will go towards your next month’s bill. This can help you avoid interest charges and keep your account in good standing.
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Introduction
If you overpay your credit card, the extra money will go toward your next month’s balance. If you have a credit balance, the overpayment will lower your balance. You will not be charged interest on the overpayment, but you may be charged a fee if your overpayment causes your account to go over the credit limit.
What Happens If You Overpay Your Credit Card
If you have a credit card with a balance, and you make a payment that is more than the current outstanding balance, the card issuer will apply the excess payment to the balance. This is called an overpayment.
The Credit Card Company Will Refund the Overpayment
If you overpay your credit card balance, the credit card company will refund the overpayment. You may have to pay a fee for the overpayment, depending on your credit card agreement. If you have a question about your specific credit card agreement, contact your credit card company.
You Will Earn Interest on the Overpayment
If you overpay your credit card balance, you will earn interest on the overpayment. The interest rate will depend on your credit card issuer, but it will typically be similar to the APR on new purchases. This means that if you have a good credit score, you could earn a decent amount of money in interest.
The Overpayment May Be Applied to Future Charges
If you overpay your credit card balance, the overpayment may be applied to future charges. This means that if you have a $1,000 balance and you make a payment of $1,200, the excess $200 may be applied to future purchases. If you do not have any future purchases, the overpayment will remain on your account as a credit until you either close the account or make a withdrawal.
Conclusion
Assuming you have a positive balance on your credit card, overpaying your credit card bill has no consequences. The extra money will simply sit in your credit card account until you use it. However, if you have a negative balance on your credit card, overpaying your bill could result in fees.
