Don’t Let Credit Card Blocks Spoil Your Vacation

A selection of credit and bank cards, along with a green British Telecom phone card, 1986. (Photo by Fox Photos/Hulton Archive/Getty Images)

Have you ever been told you were over your credit card limit, or had your debit card declined, even though you knew you had available credit, or money in your bank account? If this happened shortly after you stayed in a hotel or rented a car, the problem could have been card “blocking.”

When you use a credit or debit card to check into a hotel or rent a car, the clerk usually contacts the company that issued your card to give an estimated total. If the transaction is approved, your available credit (credit card) or the balance in your bank account (debit card) is reduced by this amount. That’s a “block.” Some companies also call this placing a “hold” on those amounts.

Blocking is used to make sure you don’t exceed your credit line (credit card) or overdraw your bank account (debit card) before checking out of a hotel or returning a rental car, leaving the merchant unpaid. Blocking is sometimes also used by restaurants for anticipated sizable bills (like large groups at dinner or a party), by companies cleaning your home, and other businesses to ensure credit or account money will be available to complete payment.

If you’re nowhere near your credit limit or don’t have a low balance in your bank account, blocking probably won’t be a problem. But if you’re reaching that point, be careful. Not only can it be embarrassing to have your card declined, it also can be inconvenient, especially if you have an emergency purchase and insufficient credit or money in your bank account. On debit cards, depending on the balance in your bank account, blocking could lead to charges for insufficient funds while the block remains in place.

How can you avoid surprises when using your credit or debit card? Read More….

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