Do you use your credit card to book travel? If the answer is yes, you will probably have to write a credit card authorization letter sooner or later.
Aside from travel, credit card authorization letters are important in any situation that requires your written consent for a company or an institution to charge your card.
To learn more about it and how to write one, look no further. We’ll teach you everything you need to know.
What Is a Credit Card Authorization Letter?
When you write a credit card authorization letter, you’re granting someone permission to use your card for a specific purpose. It’s usually addressed to an institution or company, and it is only used on a one-time basis or for a limited time indicated in the letter.
The letter contains your written consent to use the card, as well as specific instructions on how and when it may be used by the recipient. Its purpose is to allow the merchant to use your credit card without you being present to do so yourself.
To better understand this, let’s look at an example.
Travel agencies often ask for a credit card authorization letter when they book a trip on your behalf using your credit card details. By providing the letter, you consent to them using your card to book the trip. The letter also protects them from any liability in case you decide to dispute the transaction later on.
Besides booking a holiday with a travel agent, there are a few other common scenarios when you may need to write a credit card authorization letter.
💡 A credit card authorization letter shouldn’t be confused with being an authorized user. An authorized user is like a secondary account holder (without ownership) that has continuous access to the account and can use it to build credit.
When Do I Need a Credit Card Authorization Letter?
Knowing when you might need a credit card authorization letter can be extremely useful. Let’s look at a couple of common situations that may require a letter of authorization.
1. Booking a hotel room for someone else using your credit card
Many hotels make credit card authorization letters mandatory when you pay for another guest’s accommodation with your card. So if you’re feeling generous and want to pay for your spouse’s hotel room while they’re traveling, ask your hotel about the letter. Not providing it can affect your guest’s hotel stay.
2. Authorizing a business or institution to use your card on your behalf
This is usually a one-time transaction that permits a trusted institution to use your card when you’re not present. It’s most commonly used for booking flights, but there may be other situations where it’s required or useful.
How Do I Write a Credit Card Authorization Letter?
Some businesses (like hotels) usually have their own credit authorization forms. In this case, all you need to do is fill them out!
If you have to write one yourself, don’t stress. Crafting a well-written letter is quick and simple. Use simple language, a formal tone, and include the following features:
- Your full name
- Your contact information
- The date
- Your credit card information and billing address (exclude the CVV code)
- The amount you are authorizing
- The reason for the authorization (be specific!)
- The business or institution that is authorized to use it
- The amount of time they can use it for (if it’s recurring)
- Your bank’s contact information (if necessary)
- Your signature
Sample Credit Card Authorization Letter
Putting it all together, here’s an example of a detailed credit card authorization form, using the travel agency scenario.
Jane Smith 83 Park Avenue New York City, New York (212)-xxx-xxx May 17th, 2021 Re: Credit card authorization for Visa 4519-XXXX I, Jane Smith, holder of Visa credit card 4519-XXXX expiring on 07/23, authorize XYZ Travel Agency to purchase my return flight ticket to Chicago with the reference number XXX. My billing address is: 83 Park Avenue New York City, New York 10128 I agree to pay for this purchase in accordance with the issuing bank cardholder agreement. Sincerely, (YOUR SIGNATURE) Jane Smith
If you’re unsure about what to include in your letter, don’t hesitate to ask the third party you’re authorizing. Make sure you’re as specific as possible, so your credit card is used exactly as you instructed.
Download credit card hardship letter templates:
Credit card authorization letters should not be used to give a friend or a family member permission to use your credit card.
The letter does not protect you against fraud if the other person misuses the card, and giving your credit card to someone else can put you in a vulnerable situation. To make matters worse, you’re also violating your credit card agreement by sharing your card with someone else, even if you provide your written consent.
If you’re unable to use the card yourself, consider adding someone as an authorized user or a joint owner.
Do you have any questions about writing a credit card authorization letter? Let us know in the comments!