Zero-Floor Limit


DEFINITION of 'Zero-Floor Limit'

A retail authorization system in which all of a merchant's credit or debit transactions must be checked against the card's outstanding balance due and/or any Warning Bulletin listings about past-due or over-limit accounts before processing. Floor limit refers to the limit above which credit or debit transactions require authorization - when that limit is zero, all transactions require authorization, regardless of their size.

BREAKING DOWN 'Zero-Floor Limit'

The zero-floor limit is especially applicable in situations where the merchant does not have physical access to the customer's credit card, such as online and mail-order merchants. In such cases, the floor limit is always zero. Authorization is provided electronically through the debit or credit card's issuer.

  1. Warning Bulletin

    A listing compiled on a weekly basis of credit cards that have ...
  2. Deferred Credit

    Income that is received by a business but not immediately reported ...
  3. Floor Limit

    A purchase amount over which further authorization is needed ...
  4. Credit Card

    A card issued by a financial company giving the holder an option ...
  5. Available Credit

    The unused portion of an open line of credit, such as a credit ...
  6. Credit Limit

    The amount of credit that a financial institution extends to ...
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