What Does “In Credit” Mean? [US Credit 101]

In this article, we’re answering “what does in credit mean?”

This article is part of our free series on credit basics, ranging from how to get a credit card with an ITIN number to answering questions like what increases loan balance.

Feel free to use the table of contents to jump ahead to the sections most relevant to you.

Table of Contents

  1. What Does “In Credit” Mean?
  2. Frequently Asked Questions
  3. Do You Want Help Opening a US Bank Account?

What Does “In Credit” Mean?

In credit means that you have accumulated surplus funds in an account. More specifically, “in credit” refers to when you have surplus funds in an account like those for recurring expenses, loans, or credit cards. There is no negative impact on the account holder when an account is “in credit”. Instead, it usually means that the account holder has paid more than necessary in a previous billing period.

Here is a closer look at how “in credit” can happen and the implications it can have in two common scenarios. First, we’ll look at what it means with a public utilities company and next we’ll look at what it means with a credit card.

“In Credit” With an Energy Supplier

“In credit” with an energy supplier or other public utility refers to when an individual pays more than the required amount in a recent billing period. That said, it can also happen if a household uses less electricity than the amount projected by the energy company. This is because most energy companies base monthly billing on past consumption, which can result in customers paying more than necessary in current months.

“In Credit” With a Credit Card

“In credit” with a credit card company refers to when an individual has a positive balance on their card. This can happen when an individual pays more than necessary during a recent billing period. Or, they may have received a merchant refund for a payment after they already paid for that particular expense.

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Frequently Asked Questions

Below are three of the most common questions that we receive from people wondering what in credit means. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.

Does Credit Mean I Owe Money?

No, “credit” does not mean you owe money. Depending on the context in which the word is being used, it may refer to two different things. First, it may refer to money that you receive, which could be a refund or credit for a surplus payment on an account. Second, it may refer to available funding, which is money that a financial institution has made available to you for use and repayment at a future date.

Does “In Debit” Mean I Owe Money?

Yes, “In debit” means that you owe money. This term is most commonly used when referring to expense accounts like public utilities, including electricity, water, and gas. The opposite of “in debit” is “in credit”, which refers to having paid too much on an expense account and having money that will be used against future expenses.

What Does it Mean if it Says In Credit?

If it says “in credit”, it means you have a surplus balance in the account where a refund is being reported. In other words, you either paid too much in a previous billing period or you received a refund after the last billing period passed. In certain instances, credits may be rewarded if billing is best on estimated consumption (e.g. in the case of electricity), but the actual consumption was below the estimated amount.

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GlobalBanks Team
GlobalBanks Team

The GlobalBanks editorial team comprises a group of subject-matter experts from across the banking world, including former bankers, analysts, investors, and entrepreneurs. All have in-depth knowledge and experience in various aspects of international banking. In particular, they have expertise in banking for foreigners, non-residents, and both foreign and offshore companies.

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