Provisional Credit: A Plain Definition for You
Provisional credit is money a bank puts back while it checks an error claim. Here is what Regulation E says about when you get it and when it can be taken away.
You spot a charge on your account that you never made. You tell your bank. The bank cannot fix it on the spot, because it has to look first. Provisional credit is the money the bank puts back into your account while it looks. This page gives the plain definition, and follows the rules Regulation E sets for it. If you are in the middle of a claim right now, start with how to get provisional credit.
What provisional credit means
Provisional credit is a temporary refund. The bank adds the disputed amount back to your balance before it has finished checking your claim. The word "provisional" means the bank has not yet decided the claim. The money is yours to use, but the bank can take it back if it finds no error.
Not every dispute leads to it. Provisional credit comes from your own bank, under the error rules in Regulation E.
When a bank must give it
Regulation E sets the clock. It says your bank must decide if there was an error within 10 business days of getting your notice.
Ten business days is short for a bank. So the rule gives the bank a trade. Regulation E says your bank may take up to 45 days if it gives provisional credit within 10 business days.
That is the deal in plain terms. The bank buys itself more time by giving you the money first. If it wants the full 45 days, the credit must land within the first 10 business days.
There is one way the bank can skip it. Regulation E says your bank may skip provisional credit if it asked for written confirmation and got none within 10 business days. So if you reported by phone, send the written confirmation the bank asks for. Your bank may ask you to confirm a phone notice in writing within 10 business days.
How you find out you got it
You may see the money before anyone tells you. The rule does not leave you guessing. Regulation E says your bank must tell you the amount and date of a provisional credit within two business days.
So watch for a notice with two numbers on it: how much, and on what date. If the credit is there but the notice is not, that is worth raising with the bank.
What you can do with the money
The money is not frozen while the bank checks. Regulation E says you get full use of a provisional credit while your bank looks into the error.
You can spend it, pay bills with it, or leave it alone. The bank cannot treat it as pending or hold it back from you.
When it becomes permanent
The credit stops being provisional when the bank decides the claim. Regulation E says your bank must tell you if a provisional credit has been made final.
The timing of that decision follows the same clock. Ten business days for the basic case, 45 with the credit given. When the bank finds an error, it must move fast to fix it. Regulation E says your bank must fix an error within one business day after it finds one. It also says your bank may not charge you for any part of the error process if an error happened.
For the full steps of asking for the credit, see provisional credit.
When a bank can take it back
The bank can reverse the credit, but only after telling you. Regulation E says if your bank takes back a provisional credit, it must tell you the date and amount.
The rule also protects your payments for a short window. Regulation E says after taking back a provisional credit, your bank must still pay your checks and set payments for five business days. That gives you time to move money before checks start bouncing.
Special timelines
Some claims get a longer clock. Regulation E says your bank may take 90 days, not 45, for a debit card purchase at a store. Regulation E says your bank may take 90 days, not 45, for a transfer that did not start inside a state.
New accounts get a different rule at the start. Regulation E says your bank gets 20 business days, not 10, for a transfer within 30 days of a new account's first deposit.
One deadline sits on your side of the table. Regulation E says your bank must get your error notice within 60 days after it sends the statement showing the error.
If the bank finds no error
Sometimes the bank checks and finds nothing wrong. The credit comes back out. Regulation E says if your bank finds no error, it must explain why in writing.
So a reversal should never arrive as a bare debit with no letter behind it. The bank owes you its reasons on paper.
Where to go next
This page covers the definition and the rules. The site has deeper pages for the doing. Read dispute provisional credit for the claim process itself, and the how-to page for getting the credit into your account.