It takes one to three business days for credit card payments to process and reflect in the receiving bank account. This varies depending on the processors, card issuers, networks, and financial institutions involved.
Did you know that there are more than one billion active credit cards in the U.S? Or that more than 100 million credit card transactions are processed every day? Whether you’re shopping on Amazon or paying for a professional course, you’ll most likely use a credit card, just like 70% of Americans.
You’ve likely wondered how your credit card payments are processed and how long it takes. Payment processing times differ across credit card providers and processors. So, it could take anywhere from a couple of hours to several days for a payment to post. Although swiping your card takes a few seconds, the merchant may wait for days to receive the funds. Understanding this process could help you plan payments and make clearer financial decisions.
In this article, we’ll take a deeper dive into the world of credit card payments to understand how they work and what affects their processing time.
How credit card processing works
Credit card processing involves two main steps: authorization and settlement.
When you use a credit card, the card processor has to check a couple of important things. First, it checks your available credit to see if you have enough funds to pay for that transaction. Next, the processor checks all the information about the transaction for security purposes.
Security is a significant part of card processing because of rampant scams. Next, the issuing bank approves the transaction and deducts the amount from your credit limit.
After authorization and authentication, the payments on a customer’s credit card are batched and sent to a card processor. The processor sends the transaction to the proper card networks and requests the funds from the card issuers.
Next, the issuers send funds to the business owner. After this step, the transaction appears on your credit card bill. The entire process takes about three business days.
Parties that make credit card payment processing work
For a credit card payment to go through, several parties need to be in the loop. First, there’s the customer who pays for a product or service with a credit or debit card. There’s also a merchant, seller, or vendor who sells products or services to consumers.
Typically, the seller sets up a merchant account at a bank for payments received. Some other key stakeholders in the process include:
- Credit card issuer. This is the financial institution that manages a customer’s credit card account. When a customer pays, the funds leave their account with the issuing bank.
- Acquiring bank. The acquiring bank is the merchant’s financial institution. When the customer pays a merchant, the money goes to the merchant’s account with the acquiring bank.
- Payment processor. This is a financial institution that does the payment processing work. This helps the merchant receive payments.
- Card payment network. This is a company that handles payments between the credit card issuer and the acquiring bank. This isn’t a free service, as these companies get a small fee in exchange for their work. Some notable networks are American Express, Mastercard, and Visa.
Processing times for popular credit card issuers
Depending on your credit card issuer, your payment may take more or less time to process, as issuing companies have different processing times. It’s important to keep these time differences in mind, especially when making a bill payment.
Here’s a quick breakdown of processing timelines for some card manufacturers:
- American Express. An American Express one-time card payment posts almost immediately. However, it takes anywhere between 24 and 36 hours for the merchant’s bank account to be updated with the new funds. International transactions could take up to five days.
- Bank of America. Luckily, Bank of America payments to an account within the same financial institution are posted on the same day as long as they are processed before 11:59 PM EST. If you don’t meet the deadline, processing takes two to four business days. If you’re paying into a checking account at a different bank, processing takes one business day. The receiving bank account should be updated with its new balance in one to two business days.
- Capital One. Capital One card transactions are settled on the same day as long as the process starts before 8 PM EST. All payments made after 8 PM are posted the next business day. Capital One doesn’t process transactions on major holidays like Thanksgiving, Christmas, or New Year’s.
- Chase. Online payments using Chase cards are typically settled on the same day as long as they are made before 8 PM EST. Payments made between 8 PM and 11:59 PM EST are credited the same day as well. The difference is that the receiving account statement balance might not be updated until the next business day.
- Citi. Citi processes credit card online payments on the same day and updates the receiving account balance within two days. Card payments sent by mail take between five and seven business days to process. In some cases such as card refunds, the bank may need an additional five days to process the transaction.
- Discover. Discover Bank is known to process payments on the same day as long as the payment is made before 5 PM. All payments made after 5 PM are posted on the next business day.
|Credit card issuer||Processing time||Receiving balance updated|
|American Express||Same-day (one-time payments)||24 to 36 hours later|
|Bank of America||Same-day if processed before 11:59PM||1 to 2 business days|
|Capital One||Same-day if processed before 8PM||Same-day if processed before 8PM|
|Chase||Same-day if processed before 8PM||Same-day if processed before 8PM, otherwise next business day|
|Citi||Same-day||Within 2 business days|
|Discover||Same-day before 5PM, otherwise next business day||Same-day before 5PM, otherwise next business day|
You can look further into the credit cards these institutions offer (as well as other financial institutions) to ensure you find the best card for your spending habits.
How to track your credit card processing
One way to stay in the loop while your credit card transaction is being processed is to read your payment processor’s terms and conditions. It typically contains a trackable schedule for settlements. Some payment processors send payouts to merchants a few times a week. However, some also process payments when the merchant has crossed a specific mark on their current balance.
Another great way to track your card payment processing is by sending a message to your payment processor. You could also submit a support ticket and ask for your transaction logs. These logs usually contain information about settled transactions and disputes.
Remember, it’s a lot easier to track payments with payment processors — not the issuing or acquiring bank.
What can go wrong with credit card payments?
Even when you’ve done everything right, your online payment could be delayed. For most people, the biggest problem with card payments is the timing. As we’ve pointed out, most credit card companies have strict rules on how long it will take for payments to clear after a certain time.
Credit card users may also face system issues, such as faulty credit card chips. In this situation, most credit card companies respond by temporarily shutting down their systems. This helps to prevent security breaches such as hackers bypassing CVV codes, but it also could delay the credit card payment.
Can you cancel pending credit card transactions?
The short answer is yes, you can cancel your credit card transaction before it’s processed. The long answer is that credit card companies have different policies regarding pending transaction cancellations.
Timing is important here. Since most credit card issuers take a business day or two to process card payments, it’s a good idea to reach out to them to cancel your payment before the cut-off time. If you don’t, you’ll have to wait longer or process a refund instead.
Does a credit card payment post immediately?
A credit card payment may post immediately if the merchant account and the checking account linked to the card are from the same bank. Otherwise, it takes one to three days to post an online payment or phone payment. Mail payments take a few days longer.
Can I pay my credit card the same day I use it?
Yes, you can. In fact, financial experts recommend that you pay your credit card as quickly as possible.
What happens if I pay my credit card bill too early?
Paying your credit card bill early can boost your credit score as your debt reporting improves. However, keep in mind that this could also result in a late fee if you can’t keep up with the payment by the next month.
Can I max out my credit card and pay it off right away?
Yes, you can. This won’t affect your credit score since credit card issuers only share your information with credit bureaus once a month.
- Credit card processing times are different for each card issuer and type of transaction.
- Although it takes a few seconds to pay for something with a credit card, it could take one to three days to process the transaction and update the merchant’s bank account.
- A customer can track and cancel credit card transactions by reaching out to their credit card company.
View Article Sources
- Issue 1170 | Feb 2020 — Nilson Report Newsletter
- Credit Cards: Payments — HelpWithMyBank.gov
- Can You Track a Debit Card? — SuperMoney
- How to Bypass a CVV Code — SuperMoney
- What is Swiping Scamming? — SuperMoney
- How Long Does a Balance Transfer Take? — SuperMoney
- My Debit Card Chip Is Not Working — What To Do? — SuperMoney
- How To Cancel A Pending Transaction On A Debit Card — SuperMoney
- How Long Does A Debit Card Refund Take? — SuperMoney
- 2021 Consumer Credit Card Industry Study — SuperMoney
- Discover Cashback Debit Checking Account — SuperMoney