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How does pre-authorisation work on a credit card?

2 replies

kategrogen · 24/07/2023 16:59

Anyone work in banking and know how credit card pre-authorisation works?

I'm having a dispute with Airbnb and they're planning to take money from my card that I don't agree with (more about that here https://www.mumsnet.com/talk/holidays/4847376-airbnb-charging-for-damage-we-didnt-cause?latest=1)

I've cancelled my credit card and got a new one from the bank, so I assumed they won't be able to take the payment as they have my old details stored. However, I've now read that when you make an airbnb booking you 'pre-authorise' the deposite amount (up to £500 I think) and so even though I've now got a new card, that charge will just be transferred and still taken? Does anyone know if this is true?

Airbnb charging for damage we didn't cause | Mumsnet

We recently stayed in an Airbnb house in Italy. The house was very big, very old, lots of rooms and furniture, most of it well-used - it's clearly bee...

https://www.mumsnet.com/talk/holidays/4847376-airbnb-charging-for-damage-we-didnt-cause?latest=1

OP posts:
Bromptotoo · 24/07/2023 17:17

Not in banking but some idea of what pre-authorisation is.

If you enter onto a contract to hire something, maybe an Air BnB but equally could be a car the hirer asks for a deposit for any damage during the hire. AIUI pre-authorisation allows them to reserve or earmark a sum of money on your account sufficient for the deposit. They don't actually take the cash but the headroom available between what you actually owe on the card and your credit limit is reduced by the amount pre-authorised. The purpose is to ensure that the amount pre-authorised is not spent elsewhere leaving the hirer to chase you through the courts or wherever.

I suspect that if you get a new card on the same account the pre-authorisation will follow you along with any actual debt.

I suggest you talk to the card issuer and ensure they understand any attempt to actually transfer the pre-authorised amount is disputed.

kategrogen · 24/07/2023 19:58

Is there a way to tell if a sum has been preauthorised? My credit limit appears the same as usual (I.e not reduced to allow for this earmarked preauthorisation)

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