When you make a purchase with a credit or debit card, the merchant may place an authorization hold on your account. An authorization hold is a temporary freeze on the funds in your account, pending approval for the transaction. If the transaction is approved, the funds will be released and you can continue using your account as usual. If the transaction is not approved, the funds will be returned to your account and the authorization hold will be removed.
An authorization hold can impact your available credit limit and may cause your bank to charge you an overdraft fee if you do not have enough funds in your account to cover the purchase. For this reason, it is important to understand how authorization holds work and how they can affect your finances.
What is an authorization hold?
An authorization hold is a temporary freeze on the funds in your account, pending approval for the transaction. If the transaction is approved, the funds will be released and you can continue using your account as usual. If the transaction is not approved, the funds will be returned to your account and the authorization hold will be removed.
How long does an authorization hold?
An authorization hold may last for a few days or even a few weeks, depending on the merchant and the type of purchase. For example, a hotel may place an authorization hold on your account when you check in, to cover the cost of your stay. The hold may be released when you check out, or it may remain on your account until the hotel receives payment from your credit card issuer.
How do authorization holds impact your finances?
An authorization hold can impact your available credit limit and may cause your bank to charge you an overdraft fee if you do not have enough funds in your account to cover the purchase. For this reason, it is important to understand how authorization holds work and how they can affect your finances.
What can you do if you have an unauthorized transaction?
If you see an authorization hold on your account that you do not recognize, it is important to contact the merchant and your credit card issuer right away. They will be able to help you resolve the issue and determine if the transaction was authorized or not.
How can you avoid authorization holds?
Some merchants may allow you to pay with a check or cash instead of using a credit or debit card. This can help to avoid authorization holds, as well as potential overdraft fees. If you are unsure, you can always ask the merchant before making your purchase.
Understanding how authorization holds work is important for anyone who uses a credit or debit card. By knowing what an authorization hold is and how it can impact your finances, you can avoid any unexpected charges or fees. If you have any questions about authorization holds, be sure to contact your credit card issuer or the merchant before making a purchase.