Buzz
Is it possible for a company to inquire about your credit limit before they approve an order? This is the topic we're exploring this week.
Every Monday, we take on one of your most pressing personal finance queries, seeking advice from a group of financial experts. If you have a question or concern related to money, or just want to discuss anything PeFi-related, feel free to leave it in the comments or reach out to me at [email protected].
This week's question is from Ken:
Is it possible for the service or product provider to obtain information about the maximum available balance on a customer's credit card from the credit card company (or another source)? In other words, can they know whether the card has a credit limit of $3,000, $8,000, $12,000, or more?
Here’s what experts generally have to say about an issue that impacts each person in unique ways—if you’re seeking personalized advice, it’s best to consult a financial planner.
Companies don’t have insight into your available credit
For a typical merchant—think of a grocery store or clothing retailer—they don’t have a straightforward way of determining the available credit or limit on your card,” explains John Ganotis, founder of CreditCardInsider.com.
“However, a merchant could submit a pending charge to verify there’s sufficient credit to cover the purchase,” Ganotis explains. “If the pending charge is unsuccessful, the merchant knows there’s not enough available credit, though they won’t know the exact remaining balance.”
He points out that this is usually the case at gas stations. “When you swipe your card at the pump, the station typically places a $50 or $75 pending charge to confirm there’s enough credit for a full tank of gas,” he says. “Once the transaction is completed, the gas station will adjust it to reflect the actual cost. Sometimes it can take a few days for the final amount to appear.” Hotels and car rental agencies use a similar method.
Matt Schulz, Chief Industry Analyst at CompareCards, explains, “When making a purchase, the provider will only know whether you have enough credit to cover it or not.” They won’t have access to the exact amount of your credit line, large or small.
Greg McBride, chief financial analyst at Bankrate, states that it’s unlikely for a third party to have real-time information. However, “on a delayed basis, it’s possible, especially if the service provider has conducted a credit check, as they can refer to the credit report and get an estimate of the available credit as of the latest report to the credit bureau.”
So, it’s improbable that your current available credit or account balance will be disclosed legally without your approval. “That said, such information could potentially be accessed for malicious purposes, so it’s not entirely secure, much like anything else,” McBride says. But if you're concerned about your local gas station snooping into your credit details, there's no need to worry.
