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A credit card hold is a temporary hold placed on a portion of your available credit. The hold can limit your ability to make new purchases on your credit card. Here's what you need to know about a credit card hold and how it affects you.
What Is a Credit Card Hold?
A credit card hold is when a credit card issuer temporarily reserves part of your available credit for future transactions.
The most common type of credit card hold is an authorization hold. Before you can complete a credit card purchase or reservation, the business has to authorize your card. In other words, the business takes steps to verify that the card is valid and there's enough credit available for the purchase. Until your card is approved, the card issuer blocks a portion of your available credit, making it off limits for other purchases.
The authorization hold guarantees funds will be available to fund the transaction once it's processed. The hold also keeps you from going over your credit limit by deducting pending transaction amounts from your available credit. Businesses aren't allowed to place a hold on more than the estimated transaction amount.
You can find authorization holds listed as pending transactions when you check your account online. Until the transaction is approved, the authorization hold doesn't affect your credit card balance.
Authorization holds are common with certain types of businesses, including:
- Hotels
- Cruise lines
- Car rental companies
- Gas stations
- Restaurants
- Ride-sharing companies
Certain types of transactions also trigger an authorization hold:
- Trial subscriptions
- Online and phone orders
- Transactions involving gratuity
What Is a Hold on Credit Privileges?
A hold on credit privileges may result when your card issuer suspends your account due to a missed payment or if you have a payment returned. While your account is suspended, also referred to as an "administrative hold," you won't be able to make new purchases until you bring your account current again.
How Long Does a Credit Card Hold Last?
A credit card hold is typically removed once the transaction is approved. Most credit card authorizations expire within a few minutes or up to seven days. Some credit card 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. With canceled orders, it may take several days for the authorization hold to be cleared.
When you're paying a hotel, car rental or similar bill, use the same card that you booked with rather than changing payment methods. Otherwise, if you book with a credit card and use a different one for the final charge, it may take longer for the hold to expire.
If you frequently use your credit card for reservations or transactions that usually require an authorization hold, get into the habit of checking your available credit regularly. This way, you can confirm you have enough credit for your upcoming purchases.
Can You Get a Hold Removed?
A lingering authorization hold ties up credit that you could use for other purchases. Some transactions may be declined if an authorization hold takes up a significant portion of your available credit and you've opted-out of over-limit transactions. For instance, if an authorization hold lowers your available credit to $50, any transaction above that amount will be declined.
Only the credit card issuer can remove an authorization hold. They typically do so when the authorization request expires, the transaction is completed or the transaction is reversed by the business.
You can ask the merchant to remove an authorization hold if there's an issue, such as duplicate authorizations. Otherwise, if you need to free up some credit for a purchase, you can make a payment or request a credit limit increase.
When your credit card has a hold on credit privileges because of a late or returned payment, you can remove the credit card hold by making up the missed payment.
Will You Get Your Money Back From a Hold?
Because an authorization hold is simply a block on your available credit, you technically haven't been charged anything. Once the hold is released or reversed, your credit will be available for you to spend normally.
You can contact your card issuer with questions about authorization holds that appear on your account.
The Bottom Line
It may be difficult to avoid credit card holds based on your spending habits. Understanding the types of transactions that trigger a hold can help you prepare for having a portion of your credit blocked.
Consider carrying a backup credit card that you can use if authorization holds cause issues for you. A cash back credit card is a good option for flexible spending and earning rewards. Experian can provide personalized credit card offers based on your unique credit profile.