How Long Does a Company Have to Charge Your Credit Card?

Credit card transactions involve a multi-step process, from initial authorization to final settlement. Understanding this process clarifies why some charges appear immediately while others take time to finalize on your statement.

Understanding Authorization Holds

An authorization hold, also known as a pending charge or preauthorization, temporarily reserves funds on your credit card. Businesses use these holds to verify card validity and sufficient funds for a transaction. This prevents you from spending those reserved funds elsewhere.

When an authorization hold is placed, the amount is deducted from your available credit but is not yet a final charge. You will typically see this as a “pending” transaction on your online statement. Most authorization holds last five to seven days, though some card issuers may extend this to 14 days.

Certain industries, like hotels and car rental companies, may place holds that last significantly longer, sometimes up to 30 days. If a merchant does not finalize the transaction, the hold will eventually expire, and the reserved funds will become available on your card again.

Factors Influencing Charge Timing

Several elements determine when an authorized transaction becomes a final charge on your statement. Merchants typically gather all authorized transactions over a period, often a business day, and submit them in a “batch” for settlement. This batch processing means a charge might not appear as final until a day or more after your purchase.

Specific industry practices also contribute to delayed charge timing. Hotels and car rental agencies often place an initial authorization hold for an estimated amount, with the final charge processed after you check out or return the vehicle. Gas stations might place a larger initial hold at the pump, later adjusted to the actual fuel cost. Restaurants often wait to process the final charge until after a tip is added.

Weekends and holidays can extend the time it takes for a charge to post, as banking and payment processing systems may operate on a reduced schedule. Payment processors influence settlement times, with funds typically transferred to the merchant within one to three business days after authorization.

What to Do About Delayed or Unexpected Charges

If you notice a delayed or unexpected charge on your credit card statement, first thoroughly review your statements. Distinguish between pending charges (authorization holds) and posted charges (final).

Next, contact the merchant directly to inquire about the charge. Provide specific transaction details, such as the date, amount, and any reference numbers you have.

If the merchant cannot resolve the issue, you can dispute the charge with your credit card company under the Fair Credit Billing Act (FCBA). This federal law protects consumers from billing errors and unauthorized charges. You generally have 60 days from the date your statement was mailed to send a written dispute to your card issuer.

The credit card issuer must acknowledge your dispute within 30 days and complete an investigation within two billing cycles, or approximately 90 days. During this period, you are not required to pay the disputed amount, and the card issuer cannot report it as delinquent. For unauthorized charges, your liability is limited to $50. It is advisable to send your dispute in writing to the address specified by your card issuer for billing inquiries.