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Credit Card Blocking |
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Debt Management - Consumer Credit Counseling & Debt Counseling Services |
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Consumer Credit Counseling
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Credit Problems? Click for your free consultation
Credit Card Blocking (Authorizations That Freeze Your Credit Cards) Credit cards provide a certain convenience that many people have come to enjoy. You can pay your day to day expenses with a single swipe rather than having to count cash or write out a check. It's quick, it's easy, and it's a widely accepted payment form. No wonder so many people carry credit cards. But, that's not to say that credit cards don't have their faults. Take for instance those unexpected blocks you get. You know you've got more than enough credit available to cover a purchase, but the merchant tells you that they're unable to process the transaction. And then, you remember that reservation you made earlier that day. They haven't charged you yet, but they did place a hold on your funds for the amount they have estimated you will spend. This puts a damper on the rest of your day because now, you're not able to make other necessary purchases using your card even though you're not even close to your credit limit. Credit card blocking is one of those things that just happens, and there's nothing you can do to about it. You can, however, take extra precautions to avoid the inconvenience. Credit card blocking typically occurs on high transaction amounts that include compounded charges. Take for instance a hotel stay. You make a reservation for three nights, although, you might only actually stay for two. At the time of your reservation, you make the clerk well aware of your intentions, and they assure you that you will only be charged upon arrival at the hotel and for just those nights you're there. It's normal to expect that they preauthorize an amount equal to the total of one night's stay. But, it tends to be a real shocker to when you learn that they've deducted the total amount of your stay from your available balance. They might also add in charges for long distance, room service, and even housekeeping despite the fact that you haven't incurred any of them. And, to make matters worse, they don't tell you this upfront. If you're like most people, you usually find out from another merchant when they're telling you that your card has been declined. Another situation that can subject you to credit card blocking is when you rent a car. Most rental car companies will reserve the amount of your rental plus a deposit of $1000 or more from your card. They're usually pretty forward about it, but if you're not fully aware of rental policies, it might go over your head. A lot of people think that a hold is a charge because their credit limit is reduced, but, it's just a way to guarantee a merchant the funds in case they become due. Car rental holds last the full length of the rental period, and then they drop off a few days after the car is returned. With such a large deposit amount required, and depending on how many days you've rented the car, you might feel quite a pinch in your pocket when you're short of funds. There are numerous other instances where credit card blocking occurs such as when you arrange to rent a private vacation home, take your car to the shop, make reservations at a restaurant, or pump fuel at the gas station. There are many others, and as long as you use your credit cards, you'll continue to encounter them. Credit card holds can be a huge hassle if you don't prepare ahead of time. So, here's a tip for you. When you use a credit card for a transaction that's likely to cause a block, use that same card to complete the purchase. It would be even wiser to have one credit card to use just for that purpose, and have another to use for your other normal purchases. That way, you don't have to worry about running out of credit unless you overspend. [ Home
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