Merchants Choking Off Your Credit?
Posted by admin in Credit
Here's a nasty little thing that can happen if you're not aware-a merchant puts a "hold" on your credit card for a certain amount of money, to ensure that they get paid, and then, as USA Today columnist Kitty Bean Yancey found out, they sometimes forget to take the hold off, which can cause you to go over your card's limit or simply scare the bejesus out of you:
While reviewing my latest MasterCard bill, I saw a July 12 charge for about $600 from the El San Juan hotel in puerto rico (I was due to check in July 20 for three nights). I saw another charge from my July 23 checkout, bringing my total hotel bill to $1,085, which was correct. Just to be safe, I called MasterCard customer service to make sure no extra charges from the El San Juan were pending. Yes, about $900 was going to be posted, I was told. WHAT!!!!!! Did someone clear out the minibar after I left or steal the TV?
Heart pounding, I called the El San Juan, got a very nice man in the finance department, who told me it is its policy to charge your card in advance for two nights on a multi-night stay. He said the $900 was just a hold against what I might spend at the hotel – such as room service, bar and restaurant bills – and that my bank should have taken off the hold, especially since it had been three weeks since I stayed at the hotel and had paid in full.
Credit card holds don't always happen, but the most frequent places where they occur are at hotels, from rental car agencies and gas stations (there may be others). You make a reservation with a merchant (or you use the self-serve credit card reader at a gas pump) and the merchant puts a hold on a certain amount of money on your card-not charging you, but reserving the right to charge you, thus reducing your available credit by a given amount. Then, once you've paid up, they take the hold off.
They're not trying to be nasty; they just want to get paid, but the bad part is that they rarely tell you this is going to happen. As Yancey notes, if you have a low credit limit and a hold is put on but not taken off, you could end up going over your card's limit even though you have not charged too much. This will make you justifiably angry, and waste a lot of your time while you try to correct it. So be on the lookout, especially for those big holds that can happen while traveling.
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