Cash App is a great fintech platform that allows users to transfer money to one another, be it for business or personal use. While Cash App is an excellent financial solution, sometimes you might encounter issues on the platform. One common complaint many users don’t understand is what causes a negative balance. So, what is the reason the Cash App balance goes negative?
There are many reasons your Cash App balance appears negative. But the main reason is when there are charges or secondary charges (e.g., a tip) on your account, and you don’t have sufficient balance to cover it, your balance could go into the negative.
While it is unlikely that your Cash App will go negative, you should always be intentional about avoiding going into the negative balance on Cash App. But if you don’t understand why your Cash App balance keeps going into the negative, you’ve come to the right place. This article will enlighten you on why your Cash App balance is negative.
Reasons Your Cash App Balance Is Negative
Logging into your Cash App account to find your balance is negative can be quite annoying, especially when you don’t understand why. What makes it even more frustrating is that the next time someone sends money to you, the Cash App will deduct the negative balance from the money, leaving you with the balance. To prevent this issue, we will look at four common reasons your Cash App balance can be negative.
Reason #1: Someone Disputed Charges on You
One of the more common reasons your Cash App balance can go negative is when someone disputes a charge on you. The way Cash App works is that you can file a dispute when you purchase an item from a merchant and you are charged the wrong amount or sent money to the wrong person.
If, after Cash App’s investigation, the person has a legitimate claim over the money, then Cash App will debit your account. And if you do not have sufficient funds in your account for the debit, your balance will go negative, meaning you owe Cash App.
Reason #2: Insufficient Funds in Your Cash App Balance
Well, you wouldn’t have to worry about your Cash App going negative if you had sufficient funds in your account in the first place. Your Cash App goes negative in the first place because you do not have enough funds in your account.
We recommend linking your bank account to your Cash App to prevent this. So, when your balance goes negative, Cash App can bring your balance to zero by recovering the funds from the bank account you linked to your Cash App account.
Reason #3: Late Secondary Charges
Secondary charges are another reason your Cash App balance can go negative. Secondary charges are additional charges you incur when purchasing an item (e.g., tips and transaction fees). These transaction charges sometimes are not charged immediately.
So, if the primary payment goes through and you do not have sufficient funds for the secondary charges, they will be deducted from the account, pushing your balance to the negative side. This can be a frustrating experience, but since it was not your fault and you didn’t purposely do it, the company charged you a bit late, you wouldn’t be penalized by Cash App.
Reason #4: Temporary Hold of a Charge
Finally, a temporary hold of a charge on your Cash App account by an online retailer, such as when you buy something from an online store, can cause your account balance to go negative. While you may have completed payment on your side, and Cash App has approved it, the procedure is still pending as the retailer hasn’t charged you the amount yet.
It is common for retailers to charge the total amount for an item after it has been delivered. And during that period, the retailer keeps the charge on hold. And whenever the retailer asks for the hold chargeback, your balance will go negative if you don’t have that amount in your Cash App. Also, in this scenario, it is not entirely your fault; Cash App might not penalize you; however, you should do well to fund your Cash App balance on time.
While having a negative account on Cash App is rare, it happens. But often, the negative balance on your Cash App account cannot read more than -$10 or -$40 in most cases, depending on your account’s overdraft amount.
Overall, sending and receiving money on Cash App is super easy. But while you are at it, ensure you always keep some spare cash in your balance to prevent your balance from entering negative. When your Cash App balance is negative, you are in debt to Cash App. According to Cash App terms of service, you can be penalized if you refuse to bring the negative balance to zero.