Payments are the regular installments that are charged to your credit card. Authorizations for up to the full purchase amount are taken in addition to your regular installments, to guarantee your future payments.
Want to know more? Let's look at how a Splitit installment plan works.
Upon plan creation your first installment is charged immediately - this is the payment. Future monthly installments are automatically charged each month on the anniversary of your first payment. This date cannot be changed. Monthly installments will be due on your credit card bill each month.
In addition to your monthly installment payments, there is also an authorization to guarantee your purchase.
A credit card authorization is the process of verifying that a customer has enough money to make a purchase and that their card is valid. This is an automatic process that happens when a customer attempts to make a purchase from a Merchant. It is very quick and results in your purchase being accepted or declined. This process happens with all credit card transactions.
The authorization process involves several checks, including:
- Confirming the cards validity
- Ensuring the card has enough funds for the purchase
- Verifying that the cardholder's account has no restrictions
This authorization is NOT a charge, but does temporarily hold the funds on your credit card. In most cases the hold is dropped within a few business days, but we do see them remain for up to 30 days for some customers. In rare cases, your bank may hold the funds until your purchase is entirely paid off.
The length of an authorization hold is unique per customer and per purchase. Your bank and credit card issuer determine the length of the hold based on a variety of factors. Splitit cannot get a hold released; this is completely controlled by your bank.