Do Third Parties Know What Your Credit Limit Is?
Can the company ask for your credit limit before accepting an order? This is what we are discussing this week.
Every Monday, we address one of your pressing personal finance questions by seeking advice from several financial experts. If you have a general question or money issue, or just want to talk about something PeFi-related, leave it in the comments or email me at alicia.adamczyk@lifehacker.com.
Ken asks the question this week:
Can the company providing the service or product obtain from the credit card company (or other source) the maximum amount available on the customer’s credit card? In other words, does this card have available credit for $ 3,000, or $ 8,000, or $ 12,000, etc.?
This is what individual experts usually say about a problem that affects each person differently: if you need personalized advice, you should see a financial planner.
Companies don’t know how many loans you have
If we’re talking about your standard merchant — say, a grocery store or clothing retailer — they don’t have “a direct way to know the amount of credit or credit available on someone’s card,” says John Ganotis, founder of CreditCardInsider.com .
“However, the seller can file a deferred payment to make sure there is enough credit in the account to cover the purchase,” says Ganotis. “If the pending payment fails, the seller knows that there is not enough to cover the amount, although the seller cannot know the exact amount of the remaining loan.”
He notes that this is usually what happens at gas stations. “When you put your card in a gas station, the gas station will usually place a $ 50 or $ 75 deferred payment on your card to make sure there is enough credit on the card to fuel most cars,” he says. “After the transaction is completed, the gas station will complete the transaction with the actual amount. Sometimes a completed transaction appears within a few days. ” Hotels and car rental companies do something similar.
Matt Schultz, chief industry analyst at CompareCards , adds: “If you buy something, the supplier will know if you have enough funds to cover the purchase or not.” They won’t know exactly how big (or small) your line of credit is.
Greg McBride, chief financial analyst at Bankrate , says it’s unlikely that a third party would have access to the most up-to-date information. But “with a delay, this is possible, especially if the service provider has performed a credit check, since they can look at the credit report and get an idea of what credit was available at the time of the last report to the credit bureau. “
Therefore, it is unlikely that your current available credit or account balance will be disclosed, at least legally, without your consent. “However, this information could have been obtained for nefarious reasons, so it is not incomprehensible, like everything else,” says McBride. But if you don’t want your local gas station to know all the details of your credit information, then don’t worry about it.