CapitalOne - pre-auth over limit?

MagicByNature

I have one of the basic CapitalOne credit cards with a lousy £200 limit. I am soon hiring a car, and from what I understand, a deposit will be pre-authorised from my card, and will be much higher than my limit. Will the card actually allow it? If so, would I pay the over-limit penalty fee?

I did actually have a similar experience, when after the pre-authorisation was taken, i was by around £20 over limit. When I realised, I quickly paid the difference, and was not penalised. This would suggest that it's indeed possible.

Any ideas?

212

I'd imagine you're only charged for what actually appears on your statement - as you could be pre-authed for the same thing multiple times due to payment/website errors etc.

I believe whether the pre-auth is 'successful' (i.e. the car hire company see it as 'accepted' and so a valid card) would depend on your 'anticipatory' limit - the amount (above your limit) by which your company are prepared to let you go. Obviously they make extra money when you actually go over limit from charges, interest, loss of promo rates/cashback etc.

So it's about balancing the risk & reward for them, they let you go over knowing they get extra money, but then they have extra exposure to bad debt if you don't pay it back. So if they allow you to go over limit (and by how much) is up to them and depends on their rating of you.

If they let the pre-auth go through, but it's not actually 'charged' to your statement, I highly doubt they'd charge you for it - since you could genuinely be unaware of the fact you were allowing a pre-auth of higher than your limit.

The main issue you'll have is whether they allow it to go through in the first place - will you be allowed to potentially exceed your credit limit by £x.

jonesMUFCforever

The whole point of having a limit is that you know how much you can spend - a pre - auth for more than your limit is bound to fail IMO.
Can you not explain this to the credit card company and ask for a temporary higher limit?

Gurranes

212 wrote: »

I'd imagine you're only charged for what actually appears on your statement - as you could be pre-authed for the same thing multiple times due to payment/website errors etc.
....
.

Correct

Authorisations only check the validity of the card and available credit, they don't trigger fees or interest etc... This only happens when the transaction actually posts to the account.

These can be car hire, hotel check in or self service petrol for example. The pre auth may be for a generic amount e.g. what the company estimate the fee will be (1 day car hire or 1 nights stay) or be for a token £1. The actual amount then posts once the tranaction is complete.

If it is a large amount then cap 1 will have an auth strategy to allow/not allow the authorisation if you are exceeding your limit. It can depend on your previous payment history with them, how long you've held the card and any recent limit changes.

Also a pont to remember is that this auth will drop off their system after a few days, so if you use the card again you might get approved, then when the car hire oes post you might find youself way over limit - Fee time.

jonesMUFCforever

You would only get charged - yes I agree if the amount goes through - but IMO It would not get that far. You have a limit of £200 and someone wants to earmark say £400 then IMO it would result in a declined transaction.

soccermom

Do you have to go with a company that require it, We hire from budget and have never had to pay an up front deposit just the cost of the car hire.

Rates for car hire have been excellent to.

212

Remember IF it does go through, you're unlikely to be able to use your card anywhere else until the pre-auth does drop off.

Do you not have another card you can use at all? Although some places won't take debit cards, so you may have to use credit card for the deposit, and then debit card for everything else until it's gone.

jonesMUFCforever wrote: »

You would only get charged - yes I agree if the amount goes through - but IMO It would not get that far. You have a limit of £200 and someone wants to earmark say £400 then IMO it would result in a declined transaction.

In these circumstances probably very unlikely as you say, especially with Cap1 and only a £200 limit. But OP could have been eligible for an increase but rejected it (or not yet been officially offered it). In that case Cap1 would charge the hell out of you for going over your lower limit, but possibly be quite happy to let you rack up expensive debt.

I will have a £850 limit with them in a few days, nearly treble my current limit. Had I put a transaction through in the past few weeks for £500 would they let it go through? Only Cap1 could say for sure, but I'd guess they would - on the basis that they get a ridiculous amount of fees out of me, days before they'd be happy to let me go to £850 for 'free' anyway!

I've seen people at work on new accounts drop into rather large anticipatory limits - with no prior account conduct, so purely on credit scoring based on CRA data. Obviously the bank could then charge for that, and are satisfied the level of risk isn't too great so allow it to happen, but it must be a fairly standard thing to credit score based on a 'limit' and then give some leeway on top - knowing you pickup extra fees etc in the (hopefully) rare event someone used it

marjorie13

Hi my name is marjorie i just joined i was considering a dro because of my debts but now im waiting to see what money we will get weekly/monthly when this goverment reduces our money like they say they will i would like your opinion please also i have considered the step changes but they said debt management would be better than a dro guess there on the side of creditors huh.marjorie

MagicByNature

212 wrote: »

Remember IF it does go through, you're unlikely to be able to use your card anywhere else until the pre-auth does drop off.

Do you not have another card you can use at all? Although some places won't take debit cards, so you may have to use credit card for the deposit, and then debit card for everything else until it's gone.

Well of course. To be honest, the only purpose of still having this CC is for potential car hire.

soccermom wrote:

Do you have to go with a company that require it, We hire from budget and have never had to pay an up front deposit just the cost of the car hire.

Sadly, it appears all the car rental companies require a deposit of at least 600€ in Greece. The policies really must vary a lot between countries - when I booked with Hertz in UK, the pre-auth'd deposit was the price of full tank.

jonesMUFCforever wrote:

Can you not explain this to the credit card company and ask for a temporary higher limit?

Is that even doable with CapitalOne? Any experiences?

It seems my only option is to either try to get a new CC, hopefully with a higher limit, or book the car with National, as they also allow debit card deposit, so if the credit card fails, I always have a back-up plan.