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A credit card authorization is a process in which a credit card issuer verifies the validity of a credit card and approves a transaction before the funds are transferred from the cardholder's account to the merchant's account.
During a credit card authorization, the merchant sends a request to the credit card issuer to verify the cardholder's account information and available credit. The issuer then either approves or declines the transaction based on the cardholder's credit limit and account status.
A credit card authorization is necessary to protect both the merchant and the cardholder from fraudulent transactions. It ensures that the card being used is valid and has sufficient funds to cover the purchase, reducing the risk of chargebacks or unauthorized charges.
The length of time a credit card authorization holds funds varies depending on the merchant's policies and the card issuer. In most cases, the hold can last from a few hours to several days, but in some cases, it can last up to 30 days.
If a credit card authorization is declined, the transaction is not processed, and the funds are not transferred from the cardholder's account to the merchant's account. The cardholder may need to contact their card issuer to resolve any issues with their account or try using a different form of payment.