Floor Limits

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:24AM in AAT student discussion
Hiya!

Could anybody help me out and explain to me what floor limits are regarding credit cards.

I had a question regarding it on a recent simulation and my garbled, vague response wasn't good enough!!

Any help on this would be much appreciated.

Many Thanks

Sam

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Floor Limits

    Hiya,

    when you go shopping with your credit card - and you purchase say £100.00 worth of clothes on your credit card, if the floor limit detailed for that shop is £80.00, this means your card transaction will be automatically checked further.

    On some occasions the shop will ring the credit card company and give further details over the phone.

    If everything is ok they will either be given an authorisation code via the computer linkup for the transaction or this may be given verbally over the phone.

    Banks will also have a floor limit. Floor limits can be different for credit card transactions - ie cash withdrawals and account transactions. Banks will have several limits depending on the type of transaction. If a transaction is over the limit set by the bank, they will often require furhter proof of identity, and will often ring the card company / account holding branch or seek further authorisation from the 'branch office accountant / office manager'

    Finally, it is a way of protecting the card holder - the 'original certified cardholder' I mean against theft, stolen cards and fraudulaent transactions.

    It also protects the retail outlet and banks in those circumstances. Also it can be used to monitor a card holders expenditure, if a card holder persistently goes over their agreed limit - the credit card company can either put a limit per transaction on the card, or can force the retailer to withold the card and return it to them cut up if the card customer is in breach of their agrrement with the card company.

    So now you know why it takes so long sometimes for your transaction to be processed!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Floor Limits

    Which sim was this for please?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Floor Limits

    I think this popped up in Unit 1 simulation that we did!

    x

Categories

Privacy Policy