FYI: Credit & Debit Card ‘Holds’

Imagine this: You’re on a long road trip, with a tight budget. You’ve carefully calculated out all of your expenses, accounting for gas, hotels, food, plus a few extras. On day two of your trip, after filling up at the pump multiple times throughout the day, you check in to your hotel… or at least, you attempt to. Your card is declined. You know you have enough money to cover everything… so what happened?

Swipe a card at the gas pump, or check into a hotel—or any place where your final total isn’t known—and a merchant might place a pre-authorization ‘hold’ on your account to make sure you have the funds to cover their transaction, or any other costs that might be added to your hotel charge.

Pre-authorization holds are put in place by merchants, and are most commonly seen at gas pumps, hotels, and restaurants. The hold amounts are usually a set standard; be aware that for gas stations this hold amount can vary anywhere between $1-$150. So even if you buy only $20 worth of gas, you could have a hold on your debit or credit card for $150 for up to five days.

When a hold happens, the money is removed from your available balance, but doesn’t actually go anywhere. Although the merchant determines the hold amount, the financial institution determines the length of the hold. Hold times range from 3-5 days (USACU holds for 3). Once the hold time has passed or the charge has cleared, the hold is removed and the remaining funds are made available again in your account.

Here are a couple ways you can typically avoid this type of authorization holds:

Pay inside. When you pay inside at a gas station you are paying for exactly what you got, so there is no need for the merchant to send a temporary authorization hold.

Fill your tank for a preset amount. Instead of filling the tank, just get $30 worth of gas. Since the merchant knows what the final debit will be, they are able to send through that authorization amount.

Ask. Inquire about hotel holds in advance. See if there’s any leeway in the hold amount.

Pay cash. Often gas stations reward you with a discount when you’re paying in cash. Hotels may be a bit more leery, and may require a larger cash deposit, but some are happy if you pre-pay.

 


 

If you find yourself in a sticky situation because of a card hold, contact USAgencies’ card services department (800.452.0915, opt. 4) to discuss your options. We’re here as your advocate, and will always do whatever we can to help. 

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