What is a pre-authorization (pre-auth)?
When your card is swiped or keyed in at the merchant’s store, it is verified to your account at the bank for available funds. This debit to your account is a pre-authorization and not an actual transaction.
Depending on the method used by the merchant to process charge slips, the actual transaction will be processed within 2-5 business days.
A pre-auth appears on your account when you use your ATM/Debit Card and the merchant places a temporary “hold” on your account until the bank receives the actual debit. This happens to insure the merchant that the funds will be in your account when the transaction is finalized. Depending on the store policy, the amount of the authorization may differ from the dollar amount of the purchase. This may occur at restaurants when the tip is added, and at some pay-at-the-pump gas stations. The pre-auth will “fall” from your account when the actual debit is presented to the bank, generally within five business days.