Negative Authorization

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.

BREAKING DOWN '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. Authorization Date

    The month, day and year when a credit card transaction is approved ...
  2. Authorized Transaction

    A credit card purchase for which the merchant has received approval ...
  3. Standard Floor Limit

    The amount of money that can be charged in a transaction before ...
  4. Credit Card Authorization Key

    A code used in credit card transaction authorizations that confirms ...
  5. Carding Forum

    A website dedicated to the sharing of stolen credit card numbers. ...
  6. Approval Response

    An approval code sent to a point of sale terminal that verifies ...
Related Articles
  1. Credit & Loans

    Does a Lost or Stolen Credit Card Hurt Your Credit Score?

    Learn the ways in which a lost or stolen credit card can hurt your credit, and understand the steps you can take to protect yourself if this happens.
  2. Credit & Loans

    Credit Cards: What Are Credit Cards?

    By Brigitte Yuille Think of credit as borrowed money. This money is made available to you, but it must be repaid within an agreed amount of time. Credit cards provide a line of revolving credit. ...
  3. Credit & Loans

    What Happens When Your Credit Card Expires

    You can take advantage of this process to learn about other cards that may better suit your needs.
  4. Credit & Loans

    Credit Cards: Types Of Credit Cards

    By Brigitte YuilleCredit card products come in a wide assortment these days. Some credit card programs will ease their terms and conditions and offer perks for people with stellar credit, such ...
  5. Mutual Funds & ETFs

    Investing In Credit Card Companies

    This investment requires keeping an eye on consumer indexes and the overall health of the economy.
  6. Credit & Loans

    Credit Card Or Cash?

    Credit cards are convenient to use, but not always the best choice. Here are 5 times you shouldn't pay with a credit card – and 5 times you should.
  7. Credit & Loans

    Terrible Credit Score? Try These Credit Cards

    When your credit is less than stellar you have fewer choices. But some are still better than others. Here's our read on which cards to get.
  8. Credit & Loans

    Understanding Credit Cards

    Credit cards are a type of unsecured personal loan between the credit card issuer and the credit card holder.
  9. Credit & Loans

    10 Reasons To Use Your Credit Card

    Charging purchases is not always a no-no. In fact, there are some very sound reasons for choosing this option.
  10. Professionals

    Small Business: Minimize Your Credit Card Fees

    Accepting credit cards is a must these days, but small business owners can take steps to minimize profit-eating credit card fees.
RELATED FAQS
  1. Where are secured credit cards accepted?

    Repair a damaged credit history or establish one by opening a secured credit card account with a collateral deposit into ... Read Answer >>
  2. Am I responsible for fraudulent charges on my credit card?

    In the event that your credit card is stolen in the United States, federal law limits the liability of card holders to $5 ... Read Answer >>
  3. How do secured credit cards help me build my credit score?

    Find out how secured credit cards function and why they can be very useful for those looking to build or rebuild their credit ... Read Answer >>
  4. Why do credit card companies calculate revenue splits in terms of basis points?

    Discover how revenue splitting works and how credit card companies are able to utilize basis points in revenue splits to ... Read Answer >>
  5. What are some common models that practitioners use in quantitative analysis of equity ...

    Understand which aspects of a credit card agreement make accepting a new credit card offer a good deal or one that should ... Read Answer >>
  6. Because I missed a few credit card payments, the issuer raised my interest rate from ...

    You should first check that your credit card company is operating within your rights as a card holder. The U.S. Congress ... Read Answer >>
Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center