Pearson New International Edition International pcl tp indd 1


Establishing Credit Limits



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Professional Front Office Management Pearson New International Edition by Robert Woods, Jack D. Ninemeier, David K. Hayes, Michele A. Austin (z-lib.org)

Establishing Credit Limits
FOMs must understand the initiation and authorization process for credit and debit
cards to effectively develop policies about credit limits. Credit and debit cards are not
the same, and different issues can be encountered.
When a guest’s payment card is initiated and authorized, a fund block, or hold,
is established. The guest’s available credit (if a credit card) or the balance in the bank
account (if a debit card) is reduced by the amount of the authorization. Assume a
guest checks into the Altoona Hotel for five nights. The guest’s room is $100 per
night and, by hotel policy, the entire amount of the stay ($500) is blocked. When
determining the size of the hold, some hotels add charges for taxes and estimated
incidentals such as food and beverage purchases.

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