I can share some insights on what will happen if you apply the credit to the paid invoice, florencefitzwater.

Applying the recent credit to the old invoice paid in full will create an outstanding balance on your customer's profile. 

You can delete the invoice payment, then apply the credit. However, if you're already reconciled your bank accounts in QuickBooks, I suggest consulting with your accountant first. Any changes to your book will impact the balance of your accounts.

In QuickBooks Online, credits are used for refunds or you can apply them to future invoices. Check out this link for instructions and detailed steps: Create and apply credit memos or delayed credits.

Let me know if you need additional information by commenting below. I'll be right here to help manage your customer's transactions.