What Is Credit Card Posting?
Credit card posting is the point at which a particular transaction is "posted" to a cardholder's account and money is either added to or subtracted from the account balance. Posting occurs once a transaction has been fully processed, which may be immediately following the transaction or after some brief interval of time. Posting is part of all types of credit card transactions, including purchases, payments, refunds, and chargebacks. The day that a particular transaction is posted is known as the post date or settlement date.
Key Takeaways
- Credit card posting is part of the multi-step process in every credit card transaction.
- Posting refers to the point at which the transaction ceases to be pending and is recorded with an official post date.
- The time that elapses between a transaction and the post date is usually brief and not a significant issue for a cardholder unless it involves their own credit card payment.
- When cardholders pay too late, their payment may show a post date that is past the deadline, which can result in late fees and possible damage to their credit score.
How Credit Card Posting Works
Posting is part of the clearing and settlement process in credit card transactions. Settlement refers to the stage when the merchant gets their payment from the card issuer, while clearing involves all of the steps leading up to that.
While buying something with a credit card may seem relatively uncomplicated from the consumer's point of view, behind the scenes there are multiple steps and a variety of different parties involved in the processing of every transaction. In addition to the merchant and customer, they typically include the merchant's bank (often referred to as the acquiring bank or acquirer), the bank that issued the card, a card network (such as Mastercard or Visa), and a payment processor, which acts an intermediary to facilitate the transaction.
Once the transaction has been approved by the card network and issuing bank, it will be recorded on the cardholder's account as pending. In some cases, it may post right away, in which case the transaction date and the post date will be the same. However the post date is often a day or more after the transaction date.
Between the transaction date and the post date, the card issuer will put a hold on the cardholder's credit line for that sum of money. The hold will reduce the amount of credit the cardholder has available on that card and will remain in place until the post date, at which time the amount of the transaction will be added to the cardholder's outstanding balance. The credit line will still be reduced to reflect that charge until the cardholder pays their balance off.
Pending charges aren't subject to interest. However, once the amount is added to the cardholder's balance it will start accruing interest unless the cardholder pays their balance off before the end of the grace period.
The merchant will receive its payment, usually within a matter of days, regardless of whether the cardholder has paid their bill yet.
Warning
According to the large credit card issuer Capitol One, "your online or mobile banking app may not include pending transactions in the current balance, so it might not match your available balance."
When Consumers Need to Pay Attention
In general, the date that a transaction posts to their account, as opposed to the date the transaction actually took place, will be of little consequence to the average cardholder.
One exception, however, is when the cardholder makes their payment to the credit card issuer. If the cardholder pays too close to the due date, their payment may not post in time, and they can be subject to late fees and even see their credit score take a hit.
As a general rule, credit card issuers must post a payment on the day they receive it. However, the federal Office of the Comptroller of the Currency (OCC) notes, "the bank may set reasonable requirements for receiving payments. For instance, the bank may set a cut-off time."
The cut-off time, the OCC adds, must generally be 5 p.m. or later, and "payments received after the established cut-off time will generally be credited as of the next business day." If card issuers do impose a cut-off time it should be specified in their credit card agreements.
Which Date Appears on Your Monthly Credit Card Statement?
That depends on the credit card issuer. In general, you're most likely to see the post date. If you've ever noticed that certain transactions on your credit card statement have different dates from what you remember, that's most likely the reason; there may be a gap of a day or two between the transaction date and the date on your statement. Some credit card statements, however, show both dates.
What Happens if Your Credit Card Payment Posts After the Due Date?
If your credit card payment posts after the due date you could be subject to late fees, although, as the Consumer Financial Protection Bureau notes, you may be able to get your card issuer to waive the fee, especially if you're not a repeat offender. If your card issuer reports the late payment to a credit bureau, that will be reflected in your credit report and may lower your credit score. In addition, paying late can give your credit card issuer an excuse to raise your interest rate going forward.
How Can You Stop a Payment on Your Credit Card?
If the transaction is still in the pending phase, you can try to ask the merchant to cancel it. However, you need to act quickly, as the interval between the time a transaction occurs and when it is posted can be brief. After a transaction posts to your account, you can return the merchandise and ask the merchant for a refund. If you never received the product or service, or if it was unsatisfactory, you can request a chargeback with your card issuer.
The Bottom Line
Posting is one of the many steps in a typical credit card transaction and the point at which money changes hands. For cardholders it's important to know the due dates for their monthly credit card bills and to pay in time so that their payment doesn't post as late.
