[jpatokal]

Does anybody have a good explanation of how credit card charge limits actually work? I once had Jet Airways mistakenly charge me $30,000 (in two installments of $15,000) on a card that had a limit of $14,000, and while I was unable to use the card afterwards, the original charge should not have been possible in the first place. When I called the bank to complain, all they could say is that it was an "offline" transaction and thus apparently unlimited.

(And yes, I got it reversed eventually, and then had to pick another fight to get them to credit me the difference in exchange rates in the meantime. All this because Jet's shiny new booking engine apparently didn't multithread too well and replaced my $300 tickets with somebody else's... longer version of story here: http://www.flyertalk.com/forum/other-asian-australian-south-...)

[dsl]

The entire system is designed so banks implicitly trust each other. As with anything else, as a business grows you eventually start cutting out middlemen to reduce costs. Eventually large players are treated effectively as banks themselves, and can push any transaction they want into the network. As long as things total out correctly at the end of the day between individual banks, nobody really gets in trouble.

It ends up being a lot more complicated than that (as everything in banking is), but that is the general idea.

[triplesec]

and then... Enron.