# Credit Balances



Overview [#overview]

*Credit Balances* are containers for accumulated credits which are owned by the insured. Credit balances can rise in circumstances like:

* Overpayments of invoices
* Cancellations
* Policy changes which reduce premiums
* Shifting from a front-loaded installment schedule such as `fullPay` or `annually` to a more even schedule such as `monthly`

Likewise, credit balances can decline when used to pay [invoices](/features/billing/invoicing) or when funding [disbursements](/features/billing/disbursements).

When a [payment](/features/billing/payments) is posted and applied to an invoice with a lesser unsettled amount, the remainder will automatically be credited to the account's credit balance.

Usage [#usage]

Amounts accrued in credit balances can be drawn down via <ApiLink name="DisbursementResponse">disbursements</ApiLink> (sending funds back to the insured) or applying them to outstanding invoices using a <ApiLink name="CreditDistributionResponse">credit distribution</ApiLink>.

In either case, a new disbursement or credit distribution entity is created explicitly, and the source or sources of credit are added to it. Then, once the entity proceeds through its lifecycle and reaches `executed` state, the funds are debited from the source and to the target.

See Also [#see-also]

* [Disbursements](/features/billing/disbursements)
* [Excess Credits](/features/billing/excess-credits)
* [Invoicing](/features/billing/invoicing)
* [Payments](/features/billing/payments)
* [Account Balances API](/api/billing/account-balances)