Provisional Credit

A provisional credit refers to a temporary credit granted by a bank to an account holder, which can be subject to reversal or made permanent based on the reason behind its issuance.

Banks have the discretion to provide credit to account holders, which will then be displayed as a separate entry on the cardholder’s statement. Although the statement will indicate that it is a credit, it may not always provide a detailed explanation of the specific reason.

If cardholders are unsure about the origin of a provisional credit, they can typically contact their bank for additional information. The issuing bank can disclose the specifics of the credit, including its source, the reason for issuance, and the timeframe until the provisional credit is finalized.

A provisional credit is a temporary credit that matches the disputed transaction’s amount and is applied to your account while your bank or credit card company concludes its investigation. Financial institutions provide these credits to ensure their customers maintain access to funds, even during fraud investigations.

If the investigation determines that the alleged error was indeed incorrect, the provisional credit becomes permanent since you are no longer held responsible for the disputed transaction. However, the provisional credit will be reversed if the investigation finds you liable for the charges.