DEFINITION of 'Positive Authorization'

A system used to authorize retail purchases. Positive authorization compares all non-cash transactions against bank customer files for approval. Transactions that come back as delinquent are rejected.

BREAKING DOWN 'Positive Authorization'

Positive authorization is a stricter form of credit approval than negative authorization. Positive authorization can reject a customer who has merely temporarily exceeded his limit. Negative authorization rejects only those who are genuinely delinquent cardholders.

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RELATED FAQS
  1. What is authorized stock?

    Authorized stock represents the maximum number of common shares that can be issued legally by the company as stated in the ... Read Answer >>
  2. What are the long-term effects of delinquent accounts?

    Find out more about loan delinquency, loan defaults and the long-term consequences of borrowers who are delinquent on their ... Read Answer >>
  3. What is the difference between authorized shares and outstanding shares?

    Calculating financial ratios can help investors understand a company's financial position, but only when a knowledge of various ... Read Answer >>
  4. What is the difference between student loan default and delinquency?

    Learn the differences between simply becoming delinquent on your student loans vs. actually defaulting on your student loan ... Read Answer >>
  5. What are the differences between delinquency and default?

    Find out more about loan delinquency, loan default, and the difference between a loan borrower defaulting and being delinquent ... Read Answer >>
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