Authorization holds - can they cause you to go overlimit?

[Duncanrr]

Right now I'm dealing with some pretty low limit credit cards (300 and 600 - damn 7-10 business day holds on CL deposits).  As such, if I use these cards I can (and have) generated some serious authorization holds (in terms of credit available).  For example, I used card at bar last Saturday for 3 drinks (about $25 for the drinks).  However, the bar placed a $60 hold on the card.  I also had another couple $10 purchases that both put $25 holds on card.

Now my card has about $110 in pending transactions that should never post.  I have 2 pending transactions that havent cleared yet but are legit charges.  Will the authorization holds cause me to go over limit when these clear?  Should I make a payment to card before these post?

Thanks,

Duncan

[pizzadude]

I believe that most CCs count pre~authorized amounts against your current credit limit, in addition to charges that have already cleared.      So in theory that should prevent you from going over.   The only exception I can think would be if a pre~authorization was less than the actual charge, like a $1 preauth for a tank of gas that ends up being $56.  

[Duncanrr]

Thanks for info.  None of the holds are for $1 and the original amount of the transaction has already posted.  I really need to get a credit card with higher limits.  These require so much work to maintain.  I'm trying to push a good bit of business through them and pay off multiple times per month so I can develop good habits (especially once I get rewards card and do away with debit card).

I should keep a log of how much time I'm spending on my rebuild and stick it to my frig as a reminder....NEVER AGAIN!!!

[john398]

I think you should be fine, I did once have an issue a few years back with a debit card and authorizations causing over drafts but I got rid of that bank....but I know we are talking about credit cards

[lanc]

I think the worst case scenario is the card would be declined because of insufficient funds.  The accounts will never post with that balance much less it will never be reported on your CRAs so there isn't much to worry about.  It depends on the cc if they hold it against your limit.  My wife just had a problem with a BP gas pump and good ole amex did 3 100$ preauths and 35$ charge.  The preauths aren't being cuonted against the limit.  Oh and somehow she did 4 preauths for $1 on the cap1...not sure what happened but she said 2 of the pumps weren't working

[Anonymous]

It is possible that pre auth for purchases such as gas, or places where you can leave a tip, can cause your card to go over limit.

[ceejx]

Be careful with this, I've been screwed over twice on holds that killed me on overage fees on my bank account. One was a bar charging me AND placing a hold (and I paid the entire bill) and the other was a Chevron that places a $125 hold regardless of the amount of gas you're getting (even if it's $1). These were both on months I didn't have a lot of money cus of some major purchases and luckily the credit union was nice enough to reverse them.

[LionLaw]

I had to deal with this all the time a while back... my only CC had a $500 limit, and I would frequently use it to rent cars--which required a $400 Auth hold, even if you're getting a $10 rental for one day.

The good news is that with credit cards, auth holds don't affect your balance, and "over limit" penalties for CCs only apply when your balance goes over the limit, at least in my experience; YMMV.

On the other hand, if you're using a debit card, temp auths reduce your available balance, and you CAN get hit with overdraft fees if your available balance goes negative.   [Begin rant] I had a couple bad experiences with my debit card over the course of a couple of months, but the last straw was when a restaurant must have run my debit card THREE TIMES for a $250 meal.  All three temp auths showed up the next day and took my available balance down into negative territory.  I got hit will overdraft fees for the third charge, and for the bar tab I ran after dinner.  I immediately called the bank, explained the problem, got money transferred in from another account and got the overdraft fees waived, but still, it was a major hassle.  PLUS, all three temp auths stayed on there for another 2 or 3 days, until the single charge finally posted.  Anyway, that was the last straw for me; I'm a CC devotee now, and in the year-plus since that debacle, I haven't used my debit card for a purchase more than a handful of times. [End rant]