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Don’t pay more than what you owe on your credit card

Don’t pay more than what you owe on your credit card
Image source: Getty Images.

For most of us, our main worry is making sure we don’t have a huge amount of credit card debt. However, have you ever wondered if you can pay more than what you owe on your credit card? While possible, it’s not a great idea – especially if you do it on purpose.

We’ll break down why and look at what to do if you have overpaid on your card.

Can I overpay on my credit card?

You can overpay on your credit card accidentally or deliberately. However, in both scenarios you don’t really benefit.

You may be considering doing it intentionally. For example, you may be planning a big purchase and want to add more to your credit card before doing so. Or you may want to make sure that there is something on there to cover unexpected interest payments.

In both scenarios, you won’t actually feel any benefit. In fact, you may cause yourself some trouble. You may find yourself incurring charges as overpayments are against your credit card provider’s terms and conditions. In the worst case scenario, you could find that your credit card is frozen due to suspected money laundering. 

However, if you make an overpayment by accident, then credit card providers tend to be more lenient. There are several ways in which this could happen. For example, you could:

  • Receive a refund from a company
  • Make a duplicate manual payment
  • Make both an automatic and manual payment
  • Enter the incorrect payment amount

Whatever has happened, you will see that your balance is shown as a negative. This means that the credit card company owes you money, rather than you owing them money.

What can I do if I have paid more than I owe?

The main thing to avoid doing is trying to withdraw that balance as cash. While you obviously won’t be charged interest on it as it is an overpayment, you will be subject to your card’s cash advance fee.

There are a couple of options available to you if you find that you have accidentally overpaid your credit card. You could:

  • Leave the payment there and use it for future purchases. For example, if you have overpaid your card by £200 and then make a £50 purchase, your ‘negative’ balance would be reduced to £150. A few more purchases like that and you would soon find that you no longer have an overpayment.
  • Contact your card provider for a refund. Whether or not they are happy to give this to you will depend on the provider. With most, you will likely find that they will make a transfer into your current account. Whether or not you are charged a fee for requesting this will also depend on your provider.

It’s best to avoid leaving the overpayment on your card for a long period of time. This is simply because you are letting the card provider hang onto it, when you could have access to it and potentially earn interest on it in another account.

Other information

If you are more concerned about credit card debt than you are about paying more on your credit card, take a look at our article outlining programmes to help you pay off credit card debt. Or for more information on how to pay your credit card, take a look at the Money Advice Service

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