FlyerTalk Forums - View Single Post - strange thing happened to my available credit
Old Feb 16, 2005 | 6:26 pm
  #7  
dbayeddy2
 
Join Date: Feb 2005
Posts: 63
Authorizations Effect Posted Credit Limit

Authorizations effect the credit limit posted on the Amex website or noted on the Amex automated phone service. For example, if you have a card with a $2000 credit limit, and you have a balance of $1,900 if you pull up to a gas pump, you will have a 72 hour authorization that will ding your remaining credit for $75 on average although you actually buy only $20 in gas. If after leaving the gas pump you check your remaining credit you will note only $25 remaining credit ($2000 - ($1900 + $75) but the Amex computer system will allow you to drive down the road and fill your tank again the same day even if you then buy $30 worth of gas, causing another $75 authorization, and you then stay at a $100 a night hotel, causing on average another $250 authorization. Amex is generous enough not to stop cardholders from charging when authorizations put a cardholder over the credit limit which is not the case with many of the Visa/MC issuing banks.
The Wall Street Journal ran a story about a year ago about authorizations for gas and hotel rooms, and the manner in which Visa/MC cardholders who are travelling can find their remaining credit limit maxed out just by "lingering authorizations" from checking-in to new hotels and filling up at gas pumps while on an extended roadtrip. If memory serves me right, the article included a vignette about an American businessman who got "stuck in Greece" without enough remining credit on his Visa/MC to charge an airline ticket home although he had actually only spent about one-half of his credit limit due to lingering authorizations. Based on my travel experience, Amex will note the effect of authorizations on remaining credit but it will still allow the cardholder to continue to charge travel expenses based on the actual charge not the authorization's effect on credit limit, which is why "you don't leave home without it" when you hit the road on an extended journey.
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