As the world turns digital, online payments have become a norm. Whether you want to order a new pair of shoes or furniture for your apartment or business, you can do all this with only a click of a button on your smartphone or computer. So, let’s know, ‘What Does Temporary Credit Mean Bank of America?’.
However, as technology advances, people have become more susceptible to credit and debit card fraud.
When a cardholder claims that there’s an unverified or unauthorized transaction that appears on their statement, financial institutions are required to launch an investigation into the disputed amount.
The bank will process a temporary credit, (money issued into the cardholder’s account that acts as a placeholder until the disputed transaction is settled).
What is temporary credit Bank of America?
Temporary credit is money issued by Bank of America if a cardholder claims that an unverified or unauthorized transaction appears on their statement.
Bank of America will launch an investigation into the claim made by the cardholder.
The temporary credit acts as a placeholder to limit cash flow problems such as an overdraft during the investigation.
Why does Bank of America issue temporary credit?
There are a couple of reasons why Bank of America might issue temporary credit to a cardholder:
- There’s an unverified transaction in their account. Temporary credit then acts as a placeholder until the transaction is verified.
- An unauthorized transaction appears on the cardholder’s statement.
- An excess charge was made on a purchase than the initial agreement made with the cardholder.
- An error occurred during transaction processing.
- A charge was made by a merchant on a canceled subscription.
How long does it take to receive temporary credit from Bank of America?
Bank of America issues temporary credit within 10 days while they investigate the claim made by the cardholder.
If the claim made by the cardholder is true, for instance, in the case of an excess charge on a purchase or a charge made on a canceled subscription, Bank of America will credit the cardholder and file a chargeback on behalf of their client to the merchant’s bank.
Can temporary credit be used?
Temporary credit is issued to the cardholder’s account to ensure that the account balance does not go below the required balance during the investigation of the disputed transaction.
Therefore, the temporary credit cannot be used until the investigation is completed and the dispute is resolved.
When Bank of America has resolved the dispute, the funds will either be credited or debited back to the cardholder’s account based on the outcome of the investigation.
Conclusion
Report all suspicious transactions on your credit or debit card statement to the fraud department as soon as you perceive them.
A temporary credit is money issued by Bank of America to limit cashflow problems during an investigation into claims of an unauthorized transaction by a cardholder.
The temporary credit acts as a placeholder to prevent the balance on the cardholder’s account from falling below the required limit during an investigation of the disputed transaction.
Bank of America will credit or debit back the funds to the cardholder’s account depending on the outcome of the investigation.
Frequently asked questions
1. What is a disputed transaction?
A disputed transaction is one that the cardholder questions its validity such as an excess charge by a merchant on a purchase or a charge made on a canceled subscription.
2. Why is temporary credit issued on a transaction dispute?
A temporary credit is issued to limit cashflow problems such as overdraft and to ensure that the balance on a cardholder’s account does not fall below the required limit during an investigation.
3. What is the time limit to dispute a transaction with Bank of America?
Clients are encouraged to contact the merchant first to find an amicable solution before disputing a transaction.
Bank of America gives its clients a 60-day time limit to dispute a transaction.
4. What is Bank of America’s chargeback fee?
Bank of America charges between $25 to $50 per disputed transaction.
5. What is Bank of America’s chargeback policy?
Bank of America requires all disputes to be made within 60days from the date of the statement in question.
Clients can dispute a transaction online, through the mobile app, via email, or over the phone.
Bank of America will issue a temporary credit to the cardholder’s account of the amount being disputed.
If the cardholder wins the dispute, the credit is made permanent, if he/she loses, the credit is debited.
6. Is a chargeback the same as a refund?
A chargeback is not the same as a refund.
A refund is a repayment of funds on a purchase if a customer is dissatisfied, a chargeback, on the other hand, is a reversal on a transaction by the bank perceived by the cardholder as unauthorized.
