DEFINITION of 'Authorization Date'

The month, day and year when a credit card transaction is approved by the credit card issuer. The authorization date is identical to the transaction date when the merchant processes the credit card at the moment the sale is made, as is the case with in-person transactions where the customer expects to receive a good or service immediately after payment. The authorization date might be a day later when the merchant uses batch processing, which is sometimes the case with online or phone transactions where the customer does not receive the purchased item or service immediately.

BREAKING DOWN 'Authorization Date'

Authorization is the first step in processing a credit card transaction. It occurs when you give your credit card information to a merchant and the merchant submits the transaction information to the acquirer, a financial institution that helps process credit card transactions. The acquirer then sends the information to your credit card issuer, which is a company like Chase or Citibank, and the issuer determines whether you have enough credit available to complete the transaction. This step also checks to make sure your card is not expired or hasn’t been reported as lost or stolen. If everything checks out, the transaction is authorized and your purchase is complete. The date when this process occurs is the authorization date. Once the transaction has been approved, the merchant has about 10 days from the authorization date to take the remaining steps required to settle the transaction and receive payment.

The other key date in your credit card transactions is the post date. This is when your credit card issuer processes the transaction and adds or subtracts the amount to your balance, depending on whether it is a purchase or a refund. The post date is sometimes identical to the authorization date, but it may be one to three days later, a period called the float. Your available credit will be reduced as of the authorization date, and if you check your credit card account online, you will see the transaction as pending until it actually posts.

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