How Long Does a Hold Last on a Credit Card?
Understand credit card holds: how long they tie up your available credit, what affects their release, and practical ways to manage them effectively.
A credit card hold is a temporary authorization of funds that reduces a cardholder’s available credit. It ensures sufficient funds are available for a transaction before processing. Understanding these holds is helpful for managing personal finances, as they can temporarily limit spending ability. This article clarifies why these holds occur, how long they typically last, and how cardholders can manage them.
Understanding Credit Card Holds
A credit card hold, also known as a pre-authorization, involves a merchant requesting and receiving temporary approval from a card issuer to secure a specific amount of funds. This ensures the cardholder has enough available credit for a future transaction. The amount is set aside from the cardholder’s available credit but is not immediately charged to their account.
Merchants use these holds for several reasons, including guaranteeing payment, covering potential incidental expenses, or estimating a final cost when the exact amount is unknown initially. This practice helps protect businesses against potential losses and chargebacks. The hold typically appears as a “pending” transaction on a credit card statement.
Common situations where credit card holds are applied include:
Gas stations, for an estimated fill-up amount that adjusts to the actual cost.
Hotels, for room charges, potential incidentals, or damages.
Rental car companies, to cover the rental period, insurance, and possible damages or late return fees.
Online or app-based services, for future services or estimated order totals.
Factors Influencing Hold Duration
Hold duration varies significantly based on merchant policies, transaction type, and card issuer processing times. Merchants have varying policies, with some releasing holds quickly and others holding them longer, especially when the final amount is unknown. For example, a hold from a gas station might clear within hours or a day, while holds from hotels or rental car companies can last much longer.
Even after a merchant initiates the release of a hold, the bank requires time to process the release and update available credit. This processing typically takes between one to three business days. Weekends and holidays can extend this timeframe, as banking operations are limited on non-business days.
The type of transaction also plays a role in hold duration. Holds for estimated amounts, like those at gas stations or restaurants with tips, may take longer to adjust to the final charge. In contrast, holds for fixed amounts, like some online purchases, might clear once the transaction is shipped or processed. While many holds clear within a few days, certain types, such as those from lodging, vehicle rentals, or cruise lines, can last up to 31 calendar days.
Managing Credit Card Holds
Regularly monitoring your credit card account helps you stay informed about pending authorizations and actual charges. Most credit card issuers provide online banking or mobile applications to view current balances and pending transactions in real-time. Setting up alerts for pending transactions can also provide immediate notification when a hold is placed or released.
Credit card holds temporarily reduce your available credit, which can impact your ability to make additional purchases, especially if you are near your credit limit. Remember that while the held amount is unavailable, it is not an actual charge until the transaction is finalized. Understanding this can help prevent declined transactions or overspending.
If a hold appears incorrect or takes longer than expected to clear, contacting the merchant who initiated it is the first step. Merchants can typically expedite the hold’s release or provide status information. If the merchant is unhelpful or the hold persists, contact your credit card issuer next. The issuer may assist in resolving the issue or disputing an incorrect hold.