What Does It Mean When a Hotel Puts a Hold on Your Card?

A hotel placing a hold on your card is a common practice in the hospitality industry. This action, known as an authorization hold or pre-authorization, temporarily reserves a specific amount of funds on your credit or debit card. It is not an immediate charge but rather a temporary block that reduces your available credit or funds.

Understanding Hotel Card Authorizations

Hotels use card authorizations for several reasons, primarily to ensure payment for the stay and to cover potential additional expenses. This includes charges for incidentals like mini-bar purchases, room service, phone calls, or even potential damages to the room. By placing a hold, the hotel secures funds without processing an immediate charge until check-out. This practice also provides a level of security for the hotel by confirming the validity of the payment method and the availability of funds.

The Mechanics of a Hold

An authorization hold functions differently from a completed transaction or charge. When a hotel places a hold, it sends a request to your bank or card issuer to confirm and temporarily reserve funds. This amount is set aside, reducing your available balance. The hold amount typically includes the nightly room rate, taxes, and an additional sum for incidentals, which can range from $20 to $200 per day or a flat fee, depending on the hotel’s policy. Initiated at check-in or booking, these holds often last a few days after check-out, though some can persist longer depending on the card network and bank processing times.

Financial Implications for Guests

The placement of an authorization hold directly impacts a guest’s financial resources. For credit cards, the hold reduces your available credit limit, affecting your ability to make other purchases, especially if close to your limit. When using a debit card, the implications are more immediate as funds are temporarily inaccessible from your bank account. This can lead to a reduced available balance for other transactions, potentially causing declined purchases or, in some cases, overdraft fees if the account balance becomes insufficient for other debits.

Release of Authorization Holds

Hotel authorization holds are typically released automatically upon check-out, provided there are no outstanding charges. However, the actual removal of the hold and restoration of funds can take several business days. This delay is often due to the processing times of card networks and individual banks, which can range from 24 hours to 7-10 business days. If a hold persists for an unreasonable amount of time after your departure, guests should first contact the hotel directly to inquire about the status of the hold. If the hotel confirms the hold has been released but it still appears on your account, the next step is to contact your bank or credit card issuer for assistance.