What is an oustanding authorization?

What is an oustanding authorization?

An outstanding authorization is authorization obatined for a purchase that was made, but the merchant has not collected its money yet. This type of transaction will only show on your account after the merchant has collected its money. In the meantime, the money is held from your account, ready to be paid to the merchant. For example, this may happen for internet or mail/phone order purchases. The merchant may settle the money when they ship the order, rather than on the day the order was placed. In this case, the funds are marked for the merchant and deducted from the balance, but will only show on the account when the bank actually pays the merchant for your purchase. This process could take a minimum of eight days to clear.

What is a pre-authorization hold?

A pre-authorization hold happens when a merchant places a hold on a certain amount of funds on your card to verify that you have sufficient funds to pay for the transaction. As an example, a restaurant may pre-authorize a set amount when you open a tab. In the event that your bill is less than the pre-authorized amount, those remaining funds may be held for a period of time prior to being released to your available balance. Similarly, a car rental company or hotel may hold the amount equal to one day’s rental or stay. Also, please note that gas stations generally perform pre-authorization holds for approximately $50 when you choose to pay at the pump with your card. If, however, you pay for the gas inside, only the actual purchase amount will be deducted from your card balance.

Note: The value of the pre-authorization hold amount may not be available to the cardholder for eight business days.