What is a provisional credit?

A provisional credit is a temporary refund issued to your account while your bank or credit card issuer investigates a disputed transaction. It lets you recover access to funds while your claim is under review.

Provisional credits are common when you spot unauthorized transactions, billing errors, or duplicate charges on your statement. While the credit offers some short-term relief, keep in mind it may be reversed if your dispute is denied. To avoid surprises, it helps to know how the process works on both sides of the transaction.

When banks issue provisional credit

You'll typically receive a provisional credit when you dispute a transaction and the bank can't resolve the issue right away. This temporary credit gives you access to the disputed funds while the bank reviews your claim.

Common situations that may trigger a provisional credit include:

• Unauthorized or fraudulent charges on your account
• Billing errors or duplicate transactions on your statement
• Purchases for goods or services you didn't receive
• Canceled subscriptions or returned items that haven't been refunded

Keep in mind, not all disputes guarantee a provisional credit. Your bank or credit card issuer will usually consider the type of charge, timing of the dispute, and your account history before approving one. And even if you do receive a credit, it doesn't always mean the dispute will end in your favor.

How the provisional credit process works

While the specifics may differ between banks or card networks, most provisional credit processes follow a similar path. You report the issue, your financial institution issues a temporary credit, and the investigation begins. Here's how it typically goes:

Step 1. Spotting the disputed charge

It all starts when you review your bank account or credit card statement and notice a charge that looks off. Maybe it's fraudulent, a billing mistake, or a transaction that didn't pan out as expected.

Step 2. Filing a dispute with your bank

You'll need to contact your bank or card issuer to report the problem. Some banks let account holders file disputes online or through an app, while others may ask you to call or submit a written form. Speed matters here—many issuers require disputes to be filed within 60 days of the transaction date.

Step 3. Issuer review and provisional credit

If your bank can't sort out the issue immediately, they may issue a provisional credit to temporarily reimburse you. This lets you access the disputed funds while they start the dispute process, which can take a few weeks.

Step 4. Investigation and evidence gathering

Your bank will reach out to the merchant and review available evidence, like receipts, transaction logs, and any communication between you and the seller. They may also ask you to provide supporting documentation.

Step 5. Final resolution

Once your bank wraps up the review, they'll make a final call. If your dispute is approved, the provisional credit becomes permanent. If not, the provisional credit gets reversed and the original charge goes back on your account.

How long does provisional credit stay on your account?

In most cases, provisional credit remains active until your bank completes its investigation. This can take anywhere from a few days to several weeks, but most disputes are resolved within 30 to 90 business days. The timeline depends on the complexity of the case and the type of transaction involved.

While the credit is active, you can use those funds as usual. Just remember, the credit isn't guaranteed to stick around. If your dispute is denied, the bank will remove the credited amount and you'll be responsible for the original charge. If you've already spent over your credit limit, the reversal may result in an overdraft or negative account balance.

Provisional credits can be issued to either checking accounts or savings accounts. The bank applies a temporary credit equivalent to the disputed amount, but account type and institution policy may affect how and when those funds are made available.

How does a provisional credit impact vendors?

Provisional credits offer valuable protection for you as a cardholder, but they can sometimes cause headaches for vendors. When you dispute a charge, the merchant may face temporary revenue loss, extra admin work, or even lasting effects on their reputation—especially if disputes happen often.

Temporary loss of funds

When you file a dispute, the amount in question is typically held or withdrawn from the vendor's account. Even if the transaction was valid, the business may not regain access to those funds until the issuing bank completes its dispute investigation. This can disrupt their cash flow, especially for small businesses or those with slim margins.

Sometimes, the merchant may not be immediately notified of the provisional credit. This means a vendor could fulfill an order, ship a product, or provide a service without realizing the payment is being questioned.

The burden of proof

It's often up to vendors to prove a transaction was valid. They may need to submit receipts, shipping confirmations, customer communications, or signed agreements. If they don't respond in time or provide enough documentation, your bank may side with you by default.

Chargeback disputes can get especially tricky for vendors in industries where transactions are digital, service-based, or lack physical proof of delivery. These businesses need airtight processes to track purchases and customer interactions.

Long-term impact

Even if a vendor successfully disputes a chargeback, frequent disputes can snowball into bigger problems. High chargeback rates may lead to fines, account freezes, or being labeled "high-risk" by payment processors. This can affect a business's ability to process payments and erode customer trust.

Maintaining clear, easy-to-understand billing, transparent refund policies, and detailed transaction records can help vendors reduce the likelihood of disputes and respond more effectively when they happen.

Provisional credit FAQs

How do I know if my provisional credit is permanent?

Your provisional credit becomes permanent once your bank or card issuer finishes its investigation and rules in your favor. You'll usually get a notification confirming the dispute has been resolved and the credit will remain on your account. If you don't receive confirmation, check your account statements or contact your issuer directly to verify the final outcome.

Why was a provisional credit reversed on my credit or debit card?

A provisional credit gets reversed when the bank determines the disputed charge was actually valid. This usually happens after the merchant provides sufficient evidence to refute your claim or if you don't respond to requests for information. If you receive a provisional credit reversal, the original charge will be reapplied to your account and the temporary refund will be withdrawn.

How long does a provisional credit dispute take?

Most provisional credit disputes wrap up within 30 to 90 days, though the timeframe can vary based on the card network, type of transaction, and complexity of the case. During this time, your issuer will investigate the claim, gather evidence, and make a final decision. To avoid delays, respond promptly to any requests for additional info.

Does Regulation E apply to provisional credits?

Yes, but only for certain types of transactions. Regulation E applies to disputes involving electronic fund transfers on consumer accounts, such as debit card purchases, ATM withdrawals, or ACH payments. If the investigation takes more than 10 business days, the issuing bank is generally required to provide a provisional credit while the claim is under review. Regulation E does not apply to credit card transactions, which are covered by Regulation Z.

Gain control and financial visibility with Ramp

Unexpected charges can create confusion, especially when there's no clear paper trail. Ramp gives you real-time visibility into company spending, with tools to track transactions, enforce expense policies, and maintain accurate records across all departments.

Key features include:

• Automatic receipt matching
• Real-time spend tracking and alerts
• Merchant and category-level spend controls
• Customizable card limits by user or team
• Seamless integrations with accounting platforms
• Centralized visibility across departments and locations

Ramp helps you stay organized, audit-ready, and in control—no matter how complex your expenses become.