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 Credit Tips

Credit Card Blocking

You can have your credit card denied for being over-the-limit, when if fact you may be hundreds of dollars under it. Want to know why? Well, if you've recently stayed in a hotel or rented a car, the problem could be what's called credit card "blocking". 

Credit card blocking simply means that the hotel or car rental place has put a reserve on a certain amount of your credit. When you use your credit card at registration for a hotel or to secure a car rental, the clerk will contact the company that issued your card and give them an estimated total of what your bill is likely to be. If the transaction is approved, then that amount is held in reserve. In addition to the actual cost of staying in the hotel (or renting the car) the clerk may tack on reasonable "incidental" costs for such items as food or gasoline.

Now, if you pay these bills with that same credit card when you check in or return the car, the purchase will replace the block in a day or two. However, if you pay in any other manner (even with a different credit card) the block may be held for up to 15 days after you've checked out. This happens because your card company was not notified that you paid another way and therefore, thought they had to continue to hold that amount in reserve.

Credit card blocking is can be good thing because it does make sure you don't exceed your credit line before checking out or returning a car. This means that the company you receive these services from can be confident in knowing that you will pay. And if you are far enough below your limit, there's usually no problem. Unfortunately, if you are close to the limit, though, it can be an embarrassing situation and it can cause a lot of inconvenience by tying up credit that you may need for emergency purposes.

If credit card blocking could cause you problems, there are certain steps you can take to avoid it:

  • Pay for the hotel/car rental with the same card you used at check-in when possible.

  • Ask the clerk how much will be blocked and how they determined that amount.

  • If you do pay with another method, ask the clerk to call the credit company and have the block removed.

  • When you choose a credit card, ask how long they block credit lines for. 

 

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