There are few things more embarrassing than having your credit card or debit card declined. Any attempts you make while standing in the check out line, such as, “I just made deposit”, makes you feel even worse – even though you know it’s true. Before you assume your identity’s been stolen, it could be the hotel you stayed in last weekend hasn’t released its “block”.
If you’ve ever rented a car, you should know care rental companies also block or put on hold a certain dollar amount via a credit card swipe. This serves as a deposit that they don’t intend to collect unless there was damage to the rental car or a busted TV in the hotel. These blocks – or “holds” – are put into place when you reserve these hotel rooms and rental cars.
One scenario might include making reservations at a hotel in preparation of the family vacation. If the room is $200 a night and you reserve the room for seven days, there’s a good chance a hold of $1,400 will be placed on your credit card. If you’ve planned your high school reunion and are responsible for putting the deposit down on the facility, not only will your credit card be charged the deposit, but the venue manager may put his own block on your card. Not only that, but a newer practice includes tacking on potential incidentals – the hotel room’s bar, gasoline for the rental car and other possible expenses you might incur. Not all companies add these incidentals, but it is a growing practice.
If the entire transaction is placed on the same card, when you go to reconcile your bill, the holds are usually dropped in a day or so. If you use a different credit card to pay your bill, there’s a good chance those holds or blocks will remain for far longer – in some cases up to two weeks. The credit card companies don’t know the hold’s been reconciled with another credit card, so it often doesn’t expire right away.
The justifications make sense: these blocks can put you over your credit limit, which can result in fees being tacked onto your credit card account or overdraft charges on your debit card. The hotels or other companies don’t see it that way, though. To be sure you don’t max out your credit card in the theme park and then have no way to cover the hotel room when it’s time to check out, they institute these blocks to cover their own bases. Meanwhile, it can be quite a problem for you at that checkout counter when your card is declined.
While you can’t stop a company from placing a block on your credit or debit card, there are things you can do to minimize the inconvenience. One way to do this is to use the same credit card during the entire transaction. Ask the employee who processes the transaction how long the block will remain on your card. If it’s a different form of payment, you can request the employee to put the wheels in motion that will cancel the hold or block.
If you don’t have an overdraft line of credit associated with your bank debit card, it might be worth it for the peace of mind, especially if these blocks occur often. Also, the specifics vary from one credit card network to another. Check with your card companies to see which ones have the shortest block policies. You might wish to use those with as little an impact as possible.