This one: "or will the payments be applied to his balance owed?"

A credit is applied to taxes owed. A Refundable credit means it would even be paid out, if not used up against what you owe. For instance, if the person has a standard deduction that results in no income taxes computed, and also have Refundable Credits, they still get a payout, but not for any type of credit. Only the Refundable credits are payouts in that example.

It's on the Form 1040 for 2020:

Total tax Line 24

Recovery Rebate Line 30

Line 32: Add Lines 27 through 31 = your total other payments and refundable credits

Line 33: Add Lines 25d, 26 and 32 = these are your total payments

Line 34: If line 33 is more than line 24...overpaid

or;

Line 37: Subtract line 33 from line 24. This is the amount you owe now.