How is it possible that a preauth sticks to a credit card for 30 days, even though the goods have already been delivered?
It is barely possible that this is Citi's fault, but it sounds more like it is on the Costco end.   The way that this is supposed to work is that they preauthorize your card for the necessary amount.  That reserves the payment, removing the money from your credit line.  On delivery, they are supposed to capture the preauthorization.  That causes the money to transfer to them.  Until that point, they've reserved your payment but not actually received it.  If you cancel, then they don't have to pay processing fees.   The capture should allow for a larger sale so as to provide for tips, upsells, and unanticipated taxes and fees.   In this case, instead of capturing the preauthorization, they seem to have simply generated a new transaction.  Citi could be doing something wrong and processing the capture incorrectly.  Or Costco could be doing a purchase when they should be doing a capture.  From outside, we can't really say.   The thirty days would seem to be how long Costco can schedule in advance.  So the preauthorization can last that long for them.   Costco should also have the ability to cancel a preauthorization.  However, they may not know how to trigger that.  With smaller merchants, they usually have an interface where they can view preauthorizations and capture or cancel them.  Costco may have those messages sent automatically from their system.   Note that a common use for this pattern is with things like gasoline or delivery purchases.  If this has been Citi/Costco both times, I'd try ordering a pizza or some other delivery food and see if they do it correctly.  If it was Citi both times and a different merchant the other time, then it's probably a Citi problem rather than a merchant problem. "This is not a normal occurrence, and you have every right to be annoyed, but the technical way it usually happens goes like this: What can happen is when the merchant incorrectly completes the transaction without referencing the pre-authorization transaction. The bank effectively doesn't ""know"" this is the same transaction, so they process it the same way they process any other purchase, and it has no effect on the pre-authorization and related held/pending transaction. As far as the bank knows, you purchased a second set of blinds in the store for $200 and are still waiting on the first order to come in, they have no idea the store screwed up. The reason this is possible is the purpose of the pre-auth in the first place is that it is a contractual agreement between the bank (credit card) and the merchant that the funds are available, will be available except under rare special circumstances, and thus they can go ahead and process the order. This lets the merchant be secure in the knowledge that they can collect their payment, but you aren't paying interest or monthly payments on something you haven't even gotten yet! This system works reasonably well for everyone - right up until someone screws up and fails to properly release a hold, makes a second transaction instead of properly referencing the first one, or the bank screws up their system and fails to correctly match referenced pre-authorization codes to purchases. The problem is that this should not be a normal occurrence, and the people you are speaking with to try to sort out the issue often do not have the authority or knowledge necessary to properly fix the issue, or its such a hassle for them that they hope you just go away and time fixes the issue on its own. The only sure-fire solution to this is: make sure you have so much extra credit line that this doesn't effect you and you can safely let it time out on its own, or stop doing business with this combination of merchant/payment that creates the problem. Back when my credit limits were being pushed, I would never pay at gas pumps because their hold polices were so weird and unpredictable, and I would only pre-pay inside or with cash to avoid the holds." The answer to your question is very simple: The preauth and the shipment of the goods have no connection within the credit card system. It is possible to process a payment that does not cancel a preauthorization. This is needed for the case where you place two orders and the one you placed second ships first. A preauth can remain active for some time unless it is captured or cancelled. So in your case a preauth was placed and remained active. That you were shipped and billed for some goods had no effect on the preauth because one side or the other failed to attach them. Open a dispute for the preauth. It is effectively a double charge, since you have already paid for the item. You can provide evidence of the other transaction. This forces them to go through some hassle and waste some time on the issue.
Credit card limits are, for the most part, soft limits; sometimes, a credit card will allow you to charge a little over your limit. The large amount they allowed you to go over your limit is unusual, but not unheard of.  It is your responsibility to keep track of how much you charge on your credit card, not the bank. Just like with a checking account, you are supposed to keep track of everything you charge so that you always know how much you have spent and can pay it off.  Raising your limit will not help your problem; it would only make it worse. You have already charged more than you can afford, and they have already effectively raised your limit by $1200.  I realize that this situation is tough, but fortunately, you have a learning opportunity here. I recommend you resolve to stop using the credit card in this way, and work toward paying off your debt to zero. At that point, treat your credit card as if it was a debit card, and only charge what you already have in the bank to pay off right away. (Or, just use a debit card and get rid of the credit card.) Learning to do this now will save you lots of money in interest.  If you don't learn to do this, you will find yourself in even more debt in the future, and it will be even harder to dig yourself out.  If you need some more help on getting out of debt and learning to budget your money, I recommend the book The Total Money Makeover by Dave Ramsey. Until they're old enough to be legally responsible for their own credit, the only thing you can really do is show them by example how to manage money and credit in your own finances.  Teach them budgeting, immerse them in understanding how credit and financing work, and teach them smart ways to make their money work for them. When they're teenagers, you could potentially approach small banks or credit unions about ways to perhaps co-sign loans for them and let them make payments to learn good habits for managing their responsibilities, but that's not always easy either.  It won't do anything for their credit, but having the responsibility of coming in to make payments might instill good habits and help their self-esteem at the same time. You have great intentions, but as has been pointed out here already, from a legal standpoint there's not much you can do.  All you can do is prepare them for the day when they are on their own and can enter into credit agreements.  Kids going to college get into real trouble with credit because cards are handed out like candy to them by the banks, so teaching them money management skills is invaluable and something you can do now. "I also feel it's important to NOT get a credit card. I'm in my mid 30's and have had credit cards since I was 20, as has everyone I know. Every single one of those people, with the exception of my dad, is currently carrying some amount of credit card debt - almost always in the thousands of dollars.  Here is the essential problem with credit cards. Everyone sets out with good intentions, to use the credit card like a debit card, and pay charges off before interest accrues. However, almost no-one has the discipline to remember to do this, and a balance quickly builds up on the card. Also, it's extremely easy to prioritize other bill payments before credit card payments, resulting in a balance building up on the card.  It's almost magical how quickly a balance will build up on a credit card. Ultimately, they are simply too convenient, too tempting for most human beings. The world, and especially the North American world, is in a massive debt crisis. It is very easy to borrow money these days, and our culture is at the point where ""buy now pay later"" is an accepted practice.  Now that I have young children, I will be teaching them the golden rule of ""don't buy something until you have cash to pay for it in full!"" It sounds like an over simplification but this one rule will save you an incredible amount of financial grief over time." What sort of emergency requires payment up front for which 2-3 days processing of a stock sale would pose a problem? In my case, the sudden and unexpected death of my wife. Back in 2011, my wife was struck and killed in a traffic incident. I had to immediately (not in 2 - 3 days) cover 50% of the entire costs of the funeral. The balance was due shortly after, though I now forget if the balance was due in 7 days or in 30. I suspect the latter. The life insurance paid out in approximately 4 months for this simple case. Even if your mortgage is insured, you still have to pay the entire balance, along with living expenses, until the paperwork is resolved. And, again in simple cases, assume this will take months rather than days or weeks. My point is, the funeral is only one of the expenses you'll have to cover in such a situation, though generally you'll have sufficient lead time for the other expenses, where your investments would likely be sufficiently liquid. Yes, a credit card would (and did) help in this situation, but if you have no credit card (as your question poses), you need ready access to thousands of dollars to cover this sort of eventuality. My bank told me that many people in such a situation have to take out an emergency loan the very day their spouse dies. Let me assure you this would be... emotionally difficult. Funerals vary widely in price. The Motley Fool indicates the median cost of a funeral with a vault was $8,343 in 2014. Crematory fees, a headstone, flowers, food, obituaries, all add to this cost. My total cost was closer to three times the median, though some of the expenses (headstone, primarily) came later. I'm sure I could have gone for a cheaper funeral, though it's hard to make rational economic decisions at that sort of time. I don't recall the exact amount I had to put down, but it was somewhere around $6000 - $8000. (No need to leave a comment expressing condolences; thanks, but I've already had plenty and now my goal is to help share knowledge. :) ) After reading their full guarantee page, it seems that they really don't understand the definition of the word. They don't seem to offer any guarantee, but rather just a list of reasons that they believe their plan is foolproof. Mostly they argue that their lawyers have covered every angle and a lot of big players use them so naturally everyone will respect the value of their online currency. Nowhere do they address what happens if their company goes belly up, which is the primary thing I'd be worried about with this type of thing. Ironically they specifically state on their guarantee page Many first-rate payment systems tried to guarantee their stability but   unfortunately failed to fulfill their obligations given to the users   and contractors. Myopic investment policy and court claims of tax   agencies have frequently adversely affected the work of Electronic   Payment Systems. Which, personally, would make me even MORE nervous to use their system. Their guarantee amounts to, other systems have crashed and burned, but we are smarter than those guys and even hired lawyers to confirm it! Having worked at a financial institution, this is a somewhat simple, two-part solution. 1) The lendor/vendor/financial institution simply turns off the overdraft protection in all its forms. If no funds are available at a pin-presented transaction, the payment is simply declined. No fee, no overdraft, no mess. 2) This sticking point for a recurring transaction, is that merchants such as Netflix, Gold's Gym etc, CHOOSE to allow payments like this, BECAUSE they are assured they are going to get paid by the financial institution. It prevents them from having issues. Only a gift card will not cost you more money than you put in, BUT I know of several institutions, that too many non-payment periods can cause them to cease doing business with you in the future. TL:DR/IMO If you don't want to pay more than you have, gift cards are the way to go. You can re-charge them whenever you choose, and should you run into a problem, simply buy a new card and start over. They specifically state on their website this waiver does not apply to this incident.  It only applies to the use of their credit monitoring product.  [link to website](https://www.equifaxsecurity2017.com/).    So basically you can't have identify fraud then blame it on their credit monitoring tool.  In this case, Equifax is guilty of several things, not related to this product, so they can't just sneak in a clause like this. "Executive summary: It sounds like the merchant just did an authorization then cancelled that authorization when you cancelled the order, so there was never an actual charge so you'll never see an actual refund and there's no money to ""claim"". More detail: From your second paragraph, it sounds like they just did an authorization but never posted the transaction. A credit card authorization is basically the merchant asking your credit card company ""Does sandi have enough credit to pay this amount and if so please reserve that amount for a bit."" The authorization will decrease the total credit you have available on the card, but it's not actually a charge, so if your billing cycle ends, it won't show up on your statement. Depending on which company issued your credit card, you may be able to see the authorization online, usually labelled something like ""Pending transactions"". Even if your credit card company doesn't show pending transactions, you'll see a decrease in your available credit, however you shouldn't see an increase in your balance. The next step, and the only way the original merchant gets paid, is for the merchant to actually post a transaction to your card. Then it becomes a real charge that will show up on your next credit card statement and you'll be expected to pay it (unless you dispute the charge, but that's a different issue). If the charge is for the same amount as the authorization, the authorization will go away (it's now been converted to an actual charge). If the amounts are different, or the merchant never posts a transaction, the authorization will be removed by your credit card company automatically after a certain amount of time. So it sounds like you placed the order, the merchant did an authorization to make sure you could pay for it and to reserve the money, but then you cancelled the order before the merchant could post the transaction, so you were never really charged for it. The merchant then cancelled the authorization (going by the start of your third paragraph). So there was never an actual transaction posted, you were never charged, and you never really owed any money. Your available credit went down for a bit, but now should be restored to what it was before you placed the order. You'll never see an actual refund reflected on your credit card statement because there was no actual transaction."