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Floor Limit

Updated on March 20, 2023

Floor Limit refers to the limit beyond which any transaction carried through a credit card needs to be approved prior to being accepted. The floor is not standard for all credit cards and differs for each store.

The purpose of the floor limit was to avoid any situations of exceeding the credit card limit or any loss to the credit card holder for any transaction not carried out by them.

The store was also cautioned of the available credit limit of the customer in their credit card which protected them against any financial loss. The concept of floor limits does not hold as much importance today as modern credit cards have a magnetic strip that is swiped allowing the store to verify the basic details of the customer and their credit limit. The floor limit is still applicable in the case of stores that take a physical imprint of the card. However, transactions can still be approved despite the lack of a proper network provided the transaction amount is under the acceptable floor limit.