What is a credit card pre-authorization? How to use credit card pre-authorization?

Card friends, you usually only care about how to swipe your card to save money, how to swipe to enjoy discounts, etc. Have you ever paid attention to credit card pre-authorization? What is pre-authorization and what is it used for?

1. Pre-authorization

Credit card pre-authorization refers to a transaction in which the card issuer or its agency confirms the permitted frozen limit before the special merchant debits the money. To put it bluntly, a credit card pre-authorization is similar in nature to a “deposit”.

2. Pre-authorization and credit limit

What is the relationship between pre-authorization and credit limit? Does pre-authorization take up credit?

The answer is that it takes up the credit limit. For example: the credit card limit in your hand is 20,000 yuan. After pre-authorizing 1,000 yuan, the available limit becomes 19,000 yuan.

Some banks will also freeze an additional 15% of the overdraft limit based on the actual pre-authorization. This requires cardholders to confirm according to the specific card in order to arrange funds.

3. Is pre-authorization equivalent to deduction?

Pre-authorization is not equivalent to deduction. Because pre-authorization is equivalent to a "deposit", when you swipe the pre-authorization on the POS machine, some banks will notify you through a text message about consumption deductions. Don't worry, the pre-authorized amount is frozen at this time and will not be deducted. The credit card will be deducted only during the final settlement.

For example, when purchasing an iPhone 6, after payment of 5,800 yuan on a credit card is made upon delivery, the original pre-authorized frozen amount of 1,000 yuan will automatically be returned to the credit card account.

4. Pre-authorization activation and cancellation

Each credit card has pre-authorization. As long as the credit card limit is sufficient, there is no need to specifically activate the pre-authorization.

Cancellation method

There are three ways to cancel credit card pre-authorization: one is to swipe the card to check out, cancel the pre-authorization, deduct the consumption amount, and charge the remaining money in the pre-authorization; The first is to wait quietly, and the pre-authorization will be automatically canceled within a month; the third is to proactively contact the bank and apply for cancellation.