Are You Being "Held Up"?
Many merchants have a "hold" program in order to ensure that you have sufficient funds to pay for a purchase. Rather than simply entering the amount owed, merchants may add on what is called a hold. The merchant submits an "estimate" that can reach as high as 100 dollars extra - or more. This way, the money is reserved, set aside, on the credit card or in the bank, so that when you use the card again later, it does not mess up the merchant´s transaction. This can be a real pain, especially later, when you find out that the hold has affected your account negatively.
Who´s holding you up?
Most of the time holds result when you rent something and use a credit card to hold it. Not only are you reserving a rental car or a hotel room, but you are also reserving the space on your credit or debit card (you should be using your credit for these things, especially online). Until you pay, and sometimes even after, the money is submitted as estimated, and the estimate is usually higher. Recently, gas stations began instituting these holds, especially with automated pay-at-the-pump service. Many restaurants also use this policy to avoid getting stiffed for the bill.
How it works
You might find that when you initially check your account, charges might show for $75 instead of $30. The extra is the hold. Some holds can be hundreds of dollars more, depending on how expensive the item is. The merchant submits the "estimate" to the bank or credit card company electronically at the time of the purchase or reservation. Then, the money is effectively "taken out." This will reduce your available funds. After you make the purchase, or after the business has the money in its account, the actual amount is submitted, and the excess funds are replaced. The downside is that sometimes this takes days. So you may be using your credit or debit card, thinking that after you´ve made a purchase you are good to go. Until the hold catches up to you and you are told you have insufficient funds and the over-the-limit fees kick in.
What you can do
When you make a reservation or a purchase, find out if a hold will be applied to your account. A hold is sometimes called a block. If so, find out how much extra the business usually blocks off in a hold, and how long they keep the block in place. This can help you better plan around expensive holds. You can also request that the block be removed immediately after you pay. If you bring it up, most businesses will be reasonable about removing blocks. And you can avoid the hassles that come with trying to keep track of how much is available due to a hold.
