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. Authorization Only

    A type of sale transaction that creates a pending transaction ...
Related Articles
  1. Personal Finance

    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. Personal Finance

    How Credit Cards Affect Your Credit Rating

    The average American household has four cards, but does that mean more is better?
  3. Small Business

    How to Use Small Business Credit Cards

    A small business credit card can be a convenient way to increase your company's purchasing power, but must be carefully managed.
  4. Personal Finance

    How Many Credit Cards Should You Have?

    National stats indicate most consumers have three or more cards - are you one of them?
  5. Personal Finance

    Breaking Down Credit Card Fine Print

    Those "perks" offered by credit card companies usually come with strings attached, and these are just a few of them.
  6. Personal Finance

    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.
  7. Personal Finance

    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.
  8. Personal Finance

    Understanding Credit Cards

    Credit cards are a type of unsecured personal loan between the credit card issuer and the credit card holder.
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. 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 >>
  4. 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 >>
  5. How do I get a higher limit on my credit cards?

    Understand how credit limits work with major credit card companies and things you can do to get a higher limit on your credit ... Read Answer >>
Hot Definitions
  1. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
  2. Portable Alpha

    A strategy in which portfolio managers separate alpha from beta by investing in securities that differ from the market index ...
  3. Run Rate

    1. How the financial performance of a company would look if you were to extrapolate current results out over a certain period ...
  4. Hard Fork

    A hard fork (or sometimes hardfork) is a radical change to the protocol that makes previously invalid blocks/transactions ...
  5. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  6. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
Trading Center