I’m in a bit of a bind and could use some advice. I’ve just had a solid win online and want to withdraw the money, but here’s the catch: I owe $750 on my only credit card. Since my only option is to transfer the winnings to this credit card, I’m wondering how the process works.
Will the bank automatically apply the winnings to my credit card debt, or will the funds just show up as an increased available balance? I really want to use this win to pay off my debt quickly and efficiently.
And …Are there any fees I should be aware of when doing this?
If you have a balance on your credit card, any money you deposit will go toward paying off that balance.
For example, if you owe $750 and deposit $750, your balance will be $0. If you owe $3000 and deposit $750, your balance will be $2250.
When you deposit money into a credit card with a balance, the money will be used to reduce that balance. It won’t be given to you separately unless the balance is already $0.
You should also check if your deposit is counted as a payment or a statement credit. It’s more likely to be a statement credit.
For example …refunds or cash back rewards usually don’t count towards your minimum payment for the month. Instead, they just reduce your overall balance.
So, it’s a good idea to find out how this works with your card to avoid any surprises.
One thing to keep in mind is that if you’re using a rewards or cashback credit card and you get money back from a merchant, it might be processed as a refund. This could result in a deduction of rewards equal to that amount. I’ve experienced this myself, so it’s worth watching out for.
You right. Credit cards don’t usually handle negative balances like a bank account would. If you end up with a negative balance on your credit card, it means the credit card company owes you money, and they’ll typically send you a check to clear it out.
When you send money to a credit card company, you’re paying down the amount you owe, not depositing money into an account. If you need to manage funds more like a regular account, consider opening one at a bank or credit union.