Why is there a need for the payment gateway to deduct a $1 fee from my credit limit when I update to another credit card?

Question

Accepted Answer

For the purpose of authenticating the registration, a $1 transaction authentication will be performed. However, the $1 charge will not be reflected on your credit card statement, and it will automatically be reinstated back to your credit limit within 7-14 days, depending on your issuing bank.

This information is sourced from HDB.

Why is there a need for the payment gateway to deduct a $1 fee from my credit limit when I update to another credit card?

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