Why Credit Card Companies Put a Hold on Your Account for Unusual Transactions

Why Credit Card Companies Put a Hold on Your Account for Unusual Transactions

Credit cards serve many purposes for the customers that choose to use them. Credit cards are a convenient way to pay for purchases and can also build a person’s credit history and raise their credit score with proper use and prompt payment. However, taking on a credit card can sometimes be a risky venture. There are always thieves and scammers that are trying to get your credit card number to rack up the debt, purchasing whatever they want and leaving you holding the bag. to protect their customers, most credit card companies now have fraud protection steps that can assist in stopping these criminals from ruining your credit.

Monitoring Your Activity

One of the quickest ways a credit card company can help avoid fraudulent activity on your account is by monitoring the activity on your account. There is certain information that they will look for to spot fraud so that they can stop it before the transaction goes through. Two key pieces of information that these companies look for is the time and the location of the purchase. For example, if you just paid for your lunch with your card in New York City at noon, it is unlikely that you are making a purchase in a clothing store at one o’clock in Sacramento. Billing and shipping addresses that do not match on online orders are also carefully monitored. Both of these are deemed unusual activity, and there are some options that a credit card company has to remedy the situation.

Putting A Hold on Your Account

One of the quickest ways to prevent fraud on your credit card account is for the company to put a hold on your account or on specific transactions. While every credit card company has a different policy
about performing this action, it is generally done when there are obvious discrepancies with the most recent transactions. These holds can be anything from an alert to you about your account up to a denial of purchase, depending on how much fraudulent activity is showing up on your account. Typically, your credit card company will work with you to determine which purchases are yours and which are fraudulent. In most cases the credit card company will close your account to suspend any further fraudulent activity and provide you with a new account that has the same credit limit and terms as your old account.