Negative Authorization

AAA

DEFINITION of 'Negative Authorization'

A credit card approval system that compares a credit card number to a list of canceled, lost, stolen and closed-account numbers. If the number is not on one of these lists, the transaction will be approved.

INVESTOPEDIA EXPLAINS 'Negative Authorization'

Negative authorization is considered less stringent than positive authorization, which involves checking the bank's customer files for spending limits and security parameters, such as address and expiration date, before approving the transaction. Once the transaction is approved, a hold for the amount of the transaction is placed against the cardholder's credit limit.

RELATED TERMS
  1. Nonrevolver

    A credit card holder who pays his or her balance in full each ...
  2. Positive Authorization

    A system used to authorize retail purchases. Positive authorization ...
  3. Credit Card

    A card issued by a financial company giving the holder an option ...
  4. Charge Card

    A card that charges no interest but requires the user to pay ...
  5. Credit Limit

    The amount of credit that a financial institution extends to ...
  6. Available Credit

    The unused portion of an open line of credit, such as a credit ...
Related Articles
  1. Credit, Debit And Charge: Sizing Up ...
    Credit & Loans

    Credit, Debit And Charge: Sizing Up ...

  2. Take Control Of Your Credit Cards
    Credit & Loans

    Take Control Of Your Credit Cards

  3. How Credit Cards Affect Your Credit ...
    Credit & Loans

    How Credit Cards Affect Your Credit ...

  4. 6 Major Credit Card Mistakes
    Options & Futures

    6 Major Credit Card Mistakes

Hot Definitions
  1. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  2. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  5. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  6. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
Trading Center