What Does Hold Call Mean on a Credit Card?

A credit card “hold call” refers to an authorization hold, a common practice in the financial industry. This process temporarily reserves a specific amount of funds on your credit card’s available balance. It is a pre-authorization by a merchant to ensure that sufficient funds are accessible for a future transaction. The amount placed on hold is not immediately charged to your account but is set aside, reducing your available credit limit.

Understanding Credit Card Holds

A credit card hold functions as a temporary reservation of funds, not an actual charge. When a merchant initiates a hold, they verify your card’s validity and that you have enough available credit for an anticipated transaction. This pre-authorization occurs before the final transaction amount is known or settled. If approved by your card issuer, the specified amount is temporarily blocked from your available credit.

The primary purpose of these holds is to protect merchants against potential losses by ensuring funds are available when the transaction is finalized. This mechanism is particularly useful in situations where the exact final cost of a purchase is not determined at the time of the initial transaction. While the funds are held, they remain in your account and are not transferred to the merchant until the transaction is fully processed.

Common Scenarios for Credit Card Holds

Credit card holds are frequently encountered in various consumer transactions where the final charge is variable or determined after initial service. When purchasing fuel at a gas station, a temporary hold, often ranging from $50 to $100, may be placed on your card before you pump gas. This hold ensures payment for the maximum possible fuel amount, with the actual charge reflecting only the fuel dispensed once pumping is complete.

Hotels commonly use holds to cover the room rate along with potential incidental charges, such as minibar purchases or damages. This hold can be for the estimated stay cost plus an additional percentage or fixed amount. Similarly, car rental agencies place holds for the estimated rental cost, insurance, and potential additional fees like fuel charges or late return penalties. These holds ensure the rental company has security for charges beyond the base rental fee.

Restaurants and bars may also place an initial hold for the meal or drink cost before a tip is added. The final charge, including the tip, will then replace this initial hold. For online purchases or reservations, particularly for pre-orders or services where payment is collected later, holds verify card validity and reserve funds.

Impact of Credit Card Holds

A direct consequence of a credit card hold is the temporary reduction of your available credit limit. Even though the money has not been charged, the held amount is unavailable for other purchases until the hold is released. For example, if you have a $5,000 credit limit and a $200 hold is placed, your available credit drops to $4,800. This can be significant if you have a lower credit limit or plan to make multiple transactions.

The duration of these holds varies depending on the merchant, the type of transaction, and your card issuer. Most authorization holds resolve within one to seven business days once the transaction is finalized or the hold expires. However, some holds, especially from hotels or car rental companies, can last longer, sometimes up to 31 days. These temporary holds do not impact your credit score because they are not actual charges or indicators of credit utilization over time.

Managing Credit Card Holds

Effectively managing credit card holds begins with regularly checking your online banking or credit card statements for pending transactions. These statements provide real-time visibility into any amounts that are currently held. Holds are released automatically, but the exact timing varies based on the merchant’s processing and your card issuer’s policies.

If a hold appears incorrect, excessive, or persists for an unusually long time, contact the merchant who initiated the hold first. Have all transaction details readily available, such as the date, amount, and merchant name. The merchant can release the hold at any time. If the merchant is unhelpful or the hold remains beyond a reasonable period, contact your credit card issuer. While the card issuer cannot remove a merchant-initiated hold directly, they can provide insights or intervene if the hold becomes problematic after a certain timeframe.

For transactions known to involve large holds, such as car rentals or extended hotel stays, consider using a credit card with a higher available limit to avoid restricting your spending capacity. Carrying a backup payment method, such as another credit card or a debit card, is also useful. This ensures you have access to funds for other expenses, even if a significant portion of your primary card’s limit is temporarily held. Asking merchants about their hold policies beforehand can also help prevent surprises.