What is a credit card hold and how does it work?

Have you ever used a credit card to check into a hotel only to notice a pending charge on your account during your stay? Maybe you’ve noticed it when you pump gas? That’s known as a credit card hold. There’s also a different kind of credit card hold that card issuers use when cardholders make late payments or go over their credit limit. 

Learn more about how card holds work, how the two types of credit card holds differ, and how to remove and avoid credit card holds. 

Key takeaways

• There are two main types of credit card holds: authorization holds and administrative holds.     
• Merchants use authorization holds to verify that a card works and has enough funds to cover a transaction. Authorization holds might also be used as a security deposit to cover potential damage to things like a rental car or hotel room. 
• Authorization holds are typically removed once the final bill is paid—as long as there’s no damage to cover. 
• Administrative credit card holds are placed by card issuers if a cardholder does things like exceed their credit limit or make late payments.
• Administrative holds may be removed once the credit card account is in good standing, like when the cardholder pays down their balance or consistently makes on-time payments for a certain amount of time. 

A credit card hold is when a company or bank temporarily makes all or a portion of a credit card’s credit limit unavailable to the cardholder. A hold isn’t the same as a regular purchase. And the hold amount may never be processed as a purchase. It simply blocks or “holds” a certain amount of the card’s credit limit for a period of time.

Here are some businesses that commonly use credit card holds:

• Credit card issuers
• Hotels
• Gas stations
• Rental car companies
• Restaurants

There are two main types of credit card holds: authorization holds and administrative holds. Here’s how they work.

Authorization holds—also called pre-authorizations—happen when a merchant places a hold on a credit card for a certain amount of money. Authorization holds are used to verify that the card works and has enough funds to cover a future transaction.

Businesses like hotels and rental car companies commonly use credit card holds. So when you make a reservation or pick up your rental car, for example, you may not pay the bill right away. Instead, the rental car company may put a hold on your credit card until you return the car and pay the final bill.

Authorization holds can also function as a security deposit. So if the rental car comes back damaged, the hold amount may be processed as a transaction to cover it. And if the car comes back undamaged, you’ll pay the final bill amount and the hold will be removed from your card.

If a cardholder exceeds their credit limit or makes late payments, it may trigger an administrative credit card hold. The hold will typically stay on the card until the current balance is paid down to below the card’s credit limit or the cardholder consistently makes on-time payments for a certain amount of time. 

Late payments and going over a card’s credit limit can also show up on your credit report and affect your credit scores. So there are many reasons to work on using credit cards responsibly.

To remove an administrative hold from your credit card, work on making consistent on-time payments and paying down your balance so it’s below your credit limit.

When you check out of a hotel or return a rental car, you can ask if the company can immediately remove the authorization hold after you pay the final bill. If they can’t clear it right away, you can ask them for an estimated time when the hold will be removed. If you’re having trouble getting a hold to clear, you’ll need to resolve it with the merchant.

The best way to avoid administrative holds is to consistently make on-time payments and stay below your credit limit.

Generally, you can’t completely avoid authorization holds. But here are a few tips from the Federal Trade Commission (FTC) to help avoid problems related to credit card authorization holds:

• Check with the merchant. When you make a purchase or reservation, consider asking the merchant if they plan to place a hold on your card, especially if you’re giving your card information ahead of time. And if they are going to put a hold on your card, you can ask how much it will be, why they chose that amount and how long the hold will stay on your card. 
• Use the same payment method. With things like hotels or rental car reservations, you may have to put a card down to make a reservation. Using a different card or payment method to pay the final bill could cause the hold to stay on your account longer. So when possible, use the same card for the reservation and to pay the final bill. If you have to use a different payment method, let the merchant know and ask if the hold can be removed as soon as possible.
• Talk to your card issuer. If you have questions that can’t be answered by the merchant, you can contact your card issuer for more information about card holds. The card issuer may be able to tell you things like if they allow card holds, how long they typically last and if there are any restrictions on what kinds of merchants can place card holds.

Still have questions about credit card holds? Check out the answers to these frequently asked questions.

How long do credit card authorization holds last?

How long an authorization hold stays on a credit card depends on why the hold was placed, when you pay the final bill and if you use the same card that has the hold on it to pay the final bill. 

Some credit card holds may clear soon after you pay the bill. Or it may take a few days. And according to the FTC, if you use a different payment method—that doesn’t have the hold on it—to pay the bill, the hold may stay on your card for up to 15 days.

What are debit card holds?

Holds can also be placed on debit cards. With debit card holds, a portion of the card’s account balance will be temporarily unavailable.

If a debit card hold causes your account balance to dip too low, it could cause checks to bounce or other payments to be declined. So make sure to keep a close eye on your checking account balance before making any payments.  

Will my card be declined if there’s a hold on it?

It depends on how much of your credit limit or account balance—in the case of debit cards—the hold takes up. If the hold causes your account balance or available credit to dip too low, it may cause purchases that exceed your available funds to be declined. Debit card holds may cause checks to bounce, too. 

Is a credit card hold a charge?

A credit card hold isn’t a charge. It’s a temporary hold or block on a certain amount of your credit limit. In some cases, the hold may be larger than the final transaction amount. But you’ll only see the final transaction amount on your statement after the hold is removed.

But keep in mind that all or part of a credit card hold may be processed as a transaction to cover damage.

What can go wrong with a credit card hold?

One thing that could go wrong with a credit card hold is that it could cause your card or payment to be declined. In some cases, a hold may remain on your statement even after the bill is settled. If that’s the case, consider contacting the merchant to get the hold removed.

Seeing a hold on your credit or debit card can be startling if you don’t know why it’s there. But credit card authorization holds are common and often only temporary. They’ll typically be cleared once the final transaction goes through or at the end of a reservation once it’s determined that no damage needs to be covered. 

And before you book your next hotel stay or reserve a rental car, consider asking about their credit card hold policy so you’ll know what to expect.