Understanding Credit Card Holds: What They Are and When to Expect Them
A credit card hold occurs when a business temporarily locks in a specific amount on your credit card before a purchase is finalized. Often called pre-authorizations, these holds are common at places like gas stations, hotels, and car rental agencies, where the final amount owed isn’t yet determined.
These pre-authorized holds aren’t actual charges—they simply restrict part of your available credit temporarily. Since they don’t result in a direct bill, they’re typically not a cause for concern. However, it’s important to know how they work and when they might appear.
💡 Pro Tip:
Sometimes, the term “credit card hold” is used in another context—an administrative hold. This happens when your credit card issuer temporarily disables your card due to missed payments or going over your limit. In this case, you’ll need to clear the balance before you can use the card again.
When Do Credit Card Holds Occur?
Retailers use credit card holds to confirm that you have enough available credit before completing a transaction. Once the final amount is known and settled, the hold is removed.
Example: When checking into a hotel, the front desk might place a hold on your credit card in addition to the room fee. This extra amount is to cover any additional charges—commonly referred to as «incidentals.» Once you check out and your bill is finalized, the hotel lifts the hold, and you’re only charged for what you actually spent.
A similar scenario happens at gas stations. You might see a temporary hold of, say, $100, even if you only pump $40 worth of fuel. Eventually, only the actual amount you spent is charged, and the rest of the hold disappears.
The duration of a credit card hold can vary depending on the merchant and transaction type. Gas station holds typically clear within 1 to 7 days, while holds from car rental services may last for the entire rental period plus a few extra days.
💡 Pro Tip:
Credit card holds are not the same as pending transactions. A hold merely blocks part of your available credit without initiating a charge. A pending transaction, on the other hand, follows an approved purchase that hasn’t yet been fully processed. While pending transactions usually settle within three days, credit card holds can persist for longer depending on the vendor.
When Can a Credit Card Hold Become a Problem?
Though generally harmless, holds can temporarily reduce your available credit, which in turn affects your credit utilization ratio—a key factor in credit scoring. That said, because the impact is short-lived, your credit score typically remains unaffected.
Still, the limited available credit could become an inconvenience—especially during travel. For example, if you have a low credit limit or your card is nearly maxed out, a temporary hold could prevent you from making other necessary purchases.
That’s why it’s wise to carry a backup payment option, whether it’s another credit card, debit card, or even some cash—especially when traveling or renting vehicles.