Don't Let Credit Blocks Eat Up Your Available Balance

Hotels and rental agencies like to carve out the full cost of their services on your credit or debit card before you pay in full. This credit blocking can catch anyone who sticks near their minimum or maximum balance off guard when they try to use their card. Inside, learn how to keep retailers from unexpectedly clogging your credit and debit cards with unwanted blocks.

  • When you check into a hotel or rent a car – or if a restaurant or other business asks for your card in advance of service – ask if the company is “blocking,” how much will be blocked, how the amount is determined, and how long the block remains in place.
  • Consider paying hotel, motel, rental car, or other “blocked” bills with the same credit or debit card you used at the beginning of the transaction. Ask the clerk when the prior block will be removed.
  • If you pay with a different card, by cash, or by check, remind the clerk you’re using a different form of payment and ask them to remove the prior block promptly.
  • If your debit card issuer allows blocks, make sure you have overdraft protection.

Of course, keeping sufficient funds in your debit account and steering clear of maximum credit limits is the easiest way to make credit blocks painless and irrelevant.

Credit and debit card blocking can sour weekend travels – so be careful! [All Consuming]

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  1. Parting says:

    Even better : do not use your debit card.

  2. Nick1693 says:

    Blocks, Holds, It all really sucks.

  3. OMAC says:

    I used to travel a lot for business and use my personal credit cards to pay and then get reimbursed by my company. I usually had enough available on any given card but the blocks would mess up other transactions. It wasn’t the room charges that got me but the hotels would insist on blocking out for potential incidental charges too. Sometimes they blocked more than the actual room rate, and way more than I would ever use. If they were going to block out too much I would tell them I would pay cash for anything I needed, and failing that I would make them run the card through for a single night and check in again in the morning.

    Also, some cards, like the ADP Debit Payroll card will actually go above and beyond and increase some holds. I had just over $300 on my old payroll card and had to rent a car from Enterprise. I called ahead and was told they would be only hold $300 for a $70 rental, which seemed fair to me at the time. When I tried to rent the car the card was declined. I asked Enterprise how much they were holding and they said $300. I checked my balance and it was $329. I called the card company and they said that they were adding an extra 25% to the hold for incidentals, like fuel. So even though Enterprise was holding $300 ADP was trying to put a hold on the card for $375. I ditched the ADP soon after that.

    • rekoil says:

      @OMAC: WTF is a Debit Payroll Card? Some way of paying you with “gift cards” instead of an actual paycheck?

      • OMAC says:

        @rekoil:
        Yes, I had a part-time job that forced you to use their payroll debit card if you didn’t enroll in the direct deposit.. It was issued by ADP. They gave you a card and then loaded your paycheck onto it every payday. It was great for me at the time but I would never use that method again.

      • Dyscord says:

        @OMAC: My old company did that too, though we weren’t forced to do it. If we didn’t want to use them and didn’t have a bank account we could still get paper checks. They just took an extra two days to get here.

        The downside was that there were fees out the ass. Our trainer flat out told us to not use them as debit cards or fees would eat our check up. She said if you have to use them, use them as an ATM card.

      • quail says:

        @rekoil: Payroll debit cards started to show up a few years back. They’re great in that large companies actually save money by not churning out paper checks. It also helps out the working poor who don’t usually have bank accounts. The debit card keeps their cash secure until they need it.

        • azntg says:

          @quail: It’s a shame that they’re just loaded with fees though. (My guess, though it could be all wrong, is that many people would be more tempted to use it as a debit card rather than strictly as an ATM card. And in either case, more likely to do so without observing the fee schedule). A novel concept otherwise.

  4. Shrink_Ray_Bandit says:

    remind the clerk you’re using a different form of payment and ask them to remove the prior block promptly.

    That’s some wishful thinking…

  5. jamesdenver says:

    Ditto don’t use debit cards. I’d never use them for hotels and rental cars. Who knows – maybe a week later they could decide you owe them money – and take out $500. Then yuo have to argue and fight with your bank for YOUR money back

    At least with credit cards the dispute process is simply – and you don’t have to worry about your mortgage money being remotely debited away…

    • Onouris says:

      @FLConsumer: What on earth does that even mean. It’s not possible to use a Debit Card as a Credit Card, you have no credit, you have the money in your bank.

      • ChristopherDavis says:

        @Onouris: This is another case of the long-standing confusion between “where the money comes from” and “how the card is processed”, which I suspect is encouraged by the banks since they’d rather you not think about it too closely.

        To be more precise, some cards (whether they’re “credit cards” that bill you, or “debit cards” that take money from your account) can be run through transactions that either use a signature (“credit transactions”) or a PIN (“debit transactions”) for authentication.

        If you have a debit card and use it for a signature transaction, you put yourself at risk of the hold blocking access to the money in your account. FLConsumer’s comment is simply a recognition of the fact that it’s usually easier to deal with “not as much headroom under your credit limit” (if you get a hold on a credit card) than “the ATM won’t let you get your own money” (if you get a hold on a debit card, which will lower the usable balance in your account).

        I left my last bank because they replaced my ATM card with one that could be used for signature transactions; my current bank was perfectly willing to give me an ATM/debit card that’s only valid for PIN-based transactions. For signature transactions, I use a credit card.

        • Onouris says:

          @ChristopherDavis: Oh well that’s definitely fair enough. That’s why the UK completely got rid of the ability to sign when using your card in a store, all stores now have to take your PIN instead.

  6. dakker says:

    Some companies have started issuing “debit” type cards to employees and deposit your check directly into that account vs issuing checks. Its part of a larger move to go paperless. Best way to avoid those is to use direct deposit.

    • thomamas says:

      @dakker: Sounds like a way for them to get a bit of your paycheck back in fees.

      I sure hope I never get forced into something like this — with typical daily withdrawal limits, I’d spend half my life shuffling cash in and out of ATMs just to make my mortgage payments.

    • ideagirl says:

      @dakker: WTF? um, no thanks, I’ll just take my check and put it in my own account…

  7. aerick79 says:

    This is what happens when you use a credit card of debit card or even a pre-paid debit card. The Hotels and Car rental cars. They are going to over Authorizate 20% or more. IF you have a pre-paid debit card like payroll card they can hold that sometimes for a month or so. Most banks have about a 6 days hold. so that transactions will stay on there for that 6 days.

    There is some hope. You can ask you bank to “delete the pending hold” You will need the Merchant ID and the Approval code.

    I should start charging for this info

  8. J.Heck says:

    Hotels and such usually DO drop the blocks on the cards automatically at checkout. It’s not the hotel who is continually blocking the card, it’s the BANK. Companies who issue credit cards often do drop the blocks within 24 hours; it’s the DEBIT cards and standard banks who take days to drop the blocks. This is why we have a “Debit Card User Notice” at the front desk to warn everyone of what the bank will do to your funds if you use your debit card to check in with.

    How is this new practice? I’ve been working in the hotel industry for close to ten years and we’ve ALWAYS blocked cards and everyone knew it. You either get your card blocked or you pay for the entire stay up front. I guess this is finally beginning to be “big news” now that everyone’s maxed out on their credit cards.

  9. Mykro says:

    Last summer, my cousin and I decieded to take a random roadtrip to Virginia Beach (at like, 1am?) from here in Indy. We got there and checked into a Holiday Inn. I used my debit card and everything was fine. I went for food the next morning, and found out the hard way that they had a $300 hold(which I knew was going to happen) (room was $120). I politely went back to the hotel and asked to speak with the mananger. I exlained that because they have a hold on my card, that that my bank has frozen my last $50 available. She asked for my ID and debit card. She called my bank’s customer service on the card and gave them her information, and within 10 minutes the hold was gone and I had my $200+ available for useage again. Since then, my friends and family have used this same method on hotels and car rentals.
    Try it sometime

    • catastrophegirl chooses not to fly says:

      @Mykro: i wish all banks were that nice. when i worked in a hotel we got that request pretty often, especially during conventions which involved people doing their one big trip that they saved up for all year. credit unions were always pretty good about removing the block but some of the big banks [you know, the ones you see on here all the time] would just say ‘the hold will automatically drop if the charge isn’t processed in 3-4 business days. there is nothing we can do’ even if we told them that the card was no longer going to be used and the customer had paid cash for the room in the end.

      eventually management put up a sign stating that the cost of the room plus $25 would be held on the card you used to check in so that there wouldn’t be any ugly surprises. and if someone wanted to pay cash we would put the room account on ‘no posting’ and turn off pay per view manually so they didn’t have to worry about unexpected charges.

      don’t ever let a hotel tell you they can’t turn off the stuff like pay per view, they do it all the time for the adjoining room where you stashed the kiddies so that junior doesn’t decide this is a good time to check out ‘debbie does dallas’

  10. hardcle says:

    I have no great love for American Express, but their Green Cards are perfect in this situation. You won’t have to worry about any blocks or holds and you can pay it off at the end of the month with no interest.

  11. jessicat says:

    I work for a large .com shopping site and we put an authorization hold on all accounts for the amount of your pending purchase, with the actual charge coming when your stuff ships. Use a debit card and it looks just like a charge and your cash is on hold. If you call we’ll contact your bank and ask for the hold to be released as long as the actual charge has gone through, but a lot of banks (especially one that I think made the Consumerist Final Four) won’t do it. You should always check and see what the policy of your bank is before using any card for these kinds of transactions. Some banks will hold them for 30 days, which could really suck if the rent check just went out.

  12. roguemarvel says:

    I had this happen to me on vacation, except I didn’t have enough credit on my account so the hotel freaked out. I told them when I checked in I would be paying with cash, but they just had to have a card just in case. Then they had to call me and tell me I didn’t have enough money on my card (never mind the cash bit) for the room and even if I was going to pay in cash I still need to hold to room with a card. I probably should have pitched a fit more but I didn’t have the time and I just so happened to have another card. Still pissed me off.

  13. FLConsumer says:

    I secure all of my reservations on my no-limit cards. While I realize there’s always a limit of sorts, these cards usually have 3-10x your highest monthly balance as a limit, more on demand.

    At the hotel, I then pay the actual bill with the card that gives me the most points/miles/cash for the transaction. (Quite often my Starwood Amex)

    Debit cards shouldn’t be used as credit cards, full stop.

  14. bvita says:

    There seems to be a major misconception here that merchants have a magic button on the authorizers (physical or software) that can delete an auth. Unless something radical has changed in the very recent past, they don’t.

    A “hold” on a card is simply the act of a merchant running your card for a specific amount. This is the merchant asking the issuing bank for permission to charge the card UP TO that amount. The card issuer gives the merchant an authorization code for UP TO that specific amount. Once the auth has been issued, the only way it clears is either by the sale being completed (the closing of the sale reconciles the auth for the actual amount charged) or by it timing out after a predetermined amount of time. The amount of time is determined by the issuer and/or the industry (restaurant/hotel/car rental/retail). It is usually between 3 to 14 days.

    Once the auth has been issued the merchant cannot rescind it. This is to prevent fraud (get an auth, do the sale, rescind the auth, do another big sale, etc). THERE IS NO CANCEL BUTTON that the merchant can hit to remove the auth. Period. If they tell you that there is one, they’re lying. I suppose that the only way you could trick the system is to process the sale ticket, with the auth for $1.00 then void the sale. I’m not even sure that would work.

    It is sometimes possible, though totally discretionary on the part of the issuing bank, for the card holder and the merchant to petition to have a auth removed. This usually requires a written statement to the issuing bank by both the card holder and merchant requesting the removal. This might work with a local bank or small credit union that does the back office processing in house. It usually takes about the same amount of time for the auth to time out.

    We’ve successfully done this with a corporate debit card where a vendor improperly charged the card a huge amount and tied up one of our checking accounts. It took some serious hoop jumping and several days.

    I also understand that when restaurants auth a card the issuing bank automatically assumes and additional amount (20% or so) for a tip on top of the charge. This sometimes is a problem because a lot of restaurants improperly pre-auth the card for 15-20% more than the check in anticipation of a tip. This really cranks the auth – a $100 check gets preauthed at $120 – the bank adds another $24 to the auth so your card gets held for $144 until the sale clears.

  15. Sarcasmo48 says:

    The experiences I have had with holds have held true with the posters.

    One time I was at Penn Camera. The Very Nice Man that was ringing up my $800 camera accidentally rang up the wrong size filter. Rather than remove it, he “voided” the whole transaction. Now, that means voided on THEIR end, not on the bank’s end. He seemed to think it was perfectly fine that I wouldn’t be charged twice and the first hold would just fall off.

    I promptly said, “do YOU have an extra 800 dollars in your bank account I can have for a few days!”. I was joking, but I was still pissed.

    Like BVita says, there’s no magic button. They can “void” it on their books, not the bank’s. BUT, as another poster mentioned about Holiday Inn, you can get the hold removed. With my bank, it’s a pain in left ball. You have to get a letter faxed on Penn Camera letterhead to a certain number saying the hold was accidental and should be removed. Then within about a half hour it goes away.

    What the CSR at the bank told me also, is if its like my case, with an accidental purchase, DEFINITELY have them physically swipe your card again and do a refund transaction.

    Then charge you the correct amount again and all that will actually be missing from your account is the correct debit.

    That was a lot of typing.

  16. Ajh says:

    It’s unavoidable in the inner harbor during Otakon anime convention time(Another reason I stopped going other than lack of interest)

    We started booking on my un-used emergency card and paying with a different one and raising hell when the block was not removed within 3 business days of checkout.

  17. Mistrez_Mish says:

    This just happened to me. Bought a new computer last week and a rather sizable hold was placed on my credit card. Do companies arbitrarily do this? I really don’t know.

    I bought a Dell (yes, I know… but I need a new computer and the had the best system / most cost effective option for me at the time)

    … they placed a hold (I was refunded 5 days later, gladly)

    … I contacted Dell customer service and my cc’ company (my cc’ co. was helpful, Dell never replied… big shock).

    The thing that gets me is that I know other people who have purchased much more expensive computers from Dell, $1k +, and have not experienced this situation with them.

    Are companies required to disclose this sort of information if they are going to place a hold on your card? I certainly received no such information, which infuriates me. grrrr

  18. Justinh6 says:

    I find it unreal that people even care about this.

    I’ve always lived by a rule that you use credit cards when you check into a hotel, rent a car, or anything like that.

    Of course the hotel or rental car company is going to hold money when they give you a $15,000 car, or when the hotel checks you into its room with the 42 inch lcd television.

    I carry an american express card, that I don’t put any charges on ever, I just use it to check into hotels and rent cars with.

  19. Amry says:

    Great call-out that people should be aware of these holds and act accordingly, but I’m fairly certain that a lowly clerk at a motel or rental car agency has literally no way to remove a “block” or hold from your card. In my experience, in most cases, removing a hold manually involves actually speaking to the cardholder’s bank, either via phone or fax, and isn’t something that could or would be done by the person manning the front desk.