What does credit card pre-authorization mean? What’s the difference from paying directly with a credit card? Will it have any impact on the cardholder's credit? What do you think about the risk level of pre-authorized transactions versus ordinary card purchases? Does debit card also have pre-authorization service?

In the credit card pre-authorized consumption method, when the cardholder makes a purchase at a merchant, the merchant's cashier applies to the card issuer for authorization based on the cardholder's needs and the pre-estimated consumption amount. The card issuer will provide the authorization based on the customer's account situation. In response, for approved applications, the credit limit or deposit amount (debit card) in the cardholder's bank card will be temporarily frozen as a deposit. After the cardholder's consumption is officially completed, the merchant will request the card issuer to formally proceed based on the actual consumption amount. liquidation. Generally speaking, the frozen amount cannot exceed 115% of the pre-authorized transaction amount. In layman's terms, it means that when you make a reservation at a hotel, the hotel will freeze the amount that should be consumed on your credit card in advance. When you finish the meal, after you sign for confirmation, the money will be transferred from your bank account. Generally speaking, It is said to be equivalent to a deposit deducted in advance by the merchant to ensure that consumers have enough money to pay.

Debit card and credit card pre-authorization consumption. Pre-authorization business is commonly used in hotel reservations and car rentals. Whether it is a credit card or a debit card, pre-authorization can be performed. However, a credit card needs to have a sufficient overdraft amount, and a debit card needs to have a sufficient account balance.

Risk of pre-authorized consumption with debit cards and credit cards. UnionPay reminds that the risk level of "pre-authorized" transactions is the same as that of ordinary card consumption. In order to avoid losses, if customers want to cancel their reservation, they must go through the cancellation procedures with the hotel or agency before the specified time and ask for the cancellation number as a cancellation voucher. Otherwise, the merchant will deduct the corresponding room fee as agreed, and payment cannot be refused in this case.