Credit card negative balance refund bank of america

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• There are a few key details to know if you're expecting a refund on your credit card.
• When they issue a refund to your account, credit card issuers will first apply the refund to any existing balance. So don't count on having the full refund amount credited to your account.
• If a credit card refund results in a negative account balance, the issuer will either wire the money back to your checking account or send you a check. Alternatively, you could charge additional purchases to the card to bring the balance back up to zero or more.
• When you're entitled to a credit card refund, you won't be able to keep any points or miles you earned on the refunded purchase. If you use the rewards before the issuer takes them back, your rewards balance could go below zero.
• See Business Insider's list of the best rewards credit cards.

Due to the coronavirus outbreak, many concerts, conferences, and festivals have been rescheduled or postponed. Spring break and summer plans have been put on hold, and travelers have also had to cancel their flights, cruises, and hotel reservations.

While each venue or company usually has a wide range of policies, most companies have been flexible in offering customers a full refund on their purchases. But what happens after companies have issued a refund if you've paid with a credit card? 

After having to cancel several trips, including international and domestic flights and hotels, here's what I've learned about credit card refunds. 

Read more: How to cancel a trip book with Chase Ultimate Rewards points

How long do credit card refunds take?

The amount of time it takes to receive a credit card refund can vary based on the issuer and the merchant you're returning an item to or canceling a travel plan with. Generally, you'll receive a card refund within seven to 14 business days. 

Note that a credit card refund is different than a credit card chargeback, or billing dispute. While a credit card refund is the result of a merchant refunding you for a returned item or a canceled trip, a credit card billing dispute is when you were incorrectly charged for something you didn't purchase, or if you never received an item you paid for.

The refund applies to your outstanding balance first

The refund will go back on the card that you paid for. But first, the credit card company will first pay off the balance of that card. So a $1,000 hotel refund turns into $700 if you have a $300 balance on that particular card. This is unfortunate for those who have an intro APR offer or low-interest credit card and need the cash immediately, especially with the uncertainty of today's economy.  

When credit card companies immediately pay off the balance, it eliminates the option for cardholders to make smaller payments. With credit card companies offering financial assistance such as waived fees and in some cases even allowing for skipped payments without penalty, perhaps they should consider an option for consumers who have a negative balance on their credit cards to apply only part of their refund to a payment.

If you end up with a negative balance, you might receive a check

If there's a negative balance on your credit card, the issuer will send the amount back to you — but the timeline and the form of payment can vary. My JetBlue Plus Card and Bank of America® Travel Rewards Credit Card wired the money back to my checking account within 24 to 48 hours.

 My Capital One® Savor® Rewards Credit Card had a policy that they could only mail out checks. After I spoke with several customer service representatives, the company stood by its policy. In the end, they sent me a check that took seven days to arrive. For people who need the cash quickly, this could be a huge inconvenience.

In all three cases, it's important to note that I had to call in and request the balance of my credit cards to be processed back to me. It's not an automatic transaction, and for those who use their credit cards often, it may not be an issue to have a negative balance because that money will go to other purchases. Instead of asking for a refund, you could choose to spend the negative balance down to zero.    

You can't keep the rewards on refunded purchases

Finally, credit card companies will deduct any rewards points, including cash back, once a refund is processed. If the travel points or rewards have already been used, it's possible to end up with negative reward points until the points are earned back. 

I learned that it's important when you're signing up for a card to read the fine print about the refund policy. It's also important to keep track of your credit card account balances and reach out to customer service with questions so you can resolve any issues quickly.

See Business Insider's list of the best rewards credit cards »

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Mariette Williams is a freelance writer specializing in travel, finance, and culture. Mariette teaches high school journalism and lives in South Florida with her husband and two children. You can follow her on Twitter @mariettewrites. Learn more about how our team of experts tests and reviews products at Insider here.

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