Understanding Credit Card Holds: What You Need to Know

At O1ne Mortgage, we prioritize consumer credit and finance education. Understanding the intricacies of credit card holds can help you manage your finances more effectively. If you have any mortgage service needs, feel free to call us at 213-732-3074. We’re here to help!

What Is a Credit Card Hold?

A credit card hold is a temporary reservation of a portion of your available credit by the card issuer. This hold can limit your ability to make new purchases until the hold is released. The most common type of credit card hold is an authorization hold, which occurs when a business verifies that your card is valid and has enough credit available for a purchase. This process ensures that funds will be available once the transaction is processed.

Authorization holds are common in various industries, including:

• Hotels
• Cruise lines
• Car rental companies
• Gas stations
• Restaurants
• Ride-sharing companies

Additionally, certain types of transactions, such as trial subscriptions, online and phone orders, and transactions involving gratuity, can also trigger an authorization hold.

How Long Does a Credit Card Hold Last?

Typically, a credit card hold is removed once the transaction is approved. Most authorization holds expire within a few minutes to seven days. However, some holds, such as those from cruise lines, lodging merchants, or vehicle rentals, can last up to 31 days. For online purchases and preorders, the hold may be released when the purchase is shipped. In the case of canceled orders, it may take several days for the hold to be cleared.

To avoid complications, it’s advisable to use the same card for booking and final payment, especially for hotels and car rentals. This practice can help ensure that the hold expires promptly.

Can You Get a Hold Removed?

If an authorization hold is tying up your available credit, you may find it challenging to make new purchases. Only the credit card issuer can remove an authorization hold, typically when the authorization request expires, the transaction is completed, or the transaction is reversed by the business.

If you encounter issues such as duplicate authorizations, you can ask the merchant to remove the hold. Alternatively, you can make a payment or request a credit limit increase to free up some credit for a purchase. If your credit card has a hold on credit privileges due to a late or returned payment, you can remove the hold by making up the missed payment.

Will You Get Your Money Back From a Hold?

An authorization hold is simply a block on your available credit, meaning you haven’t been charged anything. Once the hold is released or reversed, your credit will be available for you to spend normally. If you have questions about authorization holds on your account, contact your card issuer for clarification.

The Bottom Line

Understanding credit card holds can help you manage your finances more effectively. While it may be difficult to avoid holds based on your spending habits, knowing which transactions trigger a hold can help you prepare for having a portion of your credit blocked. Consider carrying a backup credit card for flexible spending and earning rewards.

At O1ne Mortgage, we are committed to helping you navigate your financial journey. If you have any mortgage service needs, don’t hesitate to call us at 213-732-3074. Our team of experts is ready to assist you in making the best financial decisions.