topic Re: Credit Card "Hold" in Credit Cards

Credit Card "Hold"

SilverBerries — Fri, 13 May 2016 14:29:51 GMT

Good morning:

This may seem a strange question. We're going to be booking a hotel room for July. I have to reserve it on one of my cards upfront. However, the payment itself will be made by the uni. In the meantime, how does a "hold" on your credit card affect your utilization? Since it's going to be held until July that's quite a bit of time. Depending upon its affect, I need to decide which card to hold it with.

Thank you,

Re: Credit Card "Hold"

Pway — Fri, 13 May 2016 16:00:17 GMT

It does not. It only affects your util when it is reported to the cb. It is a hold on the funds with the lender and they cannot report that to the cb's, they only post posted charges.

Re: Credit Card "Hold"

Anonymous — Fri, 13 May 2016 17:46:58 GMT

I'm wondering how the hotel can place a "hold" that lasts two months. Un-captured authorizations drop off after about five business days.

Re: Credit Card "Hold"

RonM21 — Sat, 14 May 2016 11:32:56 GMT

Never thought about this before, but it would seem like they couldn't hold it that long. I don't think it would effect anything until reported.

Re: Credit Card "Hold"

torry590 — Sat, 14 May 2016 22:27:42 GMT

I had comfort inn put a hold that lasted exactly a month. They claim they cleared it when I checked out, but someone screwed up. Be careful with smaller chains independently owned.

Re: Credit Card "Hold"

takeshi74 — Mon, 16 May 2016 12:26:25 GMT

@SilverBerries wrote:
In the meantime, how does a "hold" on your credit card affect your utilization?

It doesn't. It only affects how much you can charge. It's posted transactions that factor into your balance and then the balance that is reported on report date. Holds are not posted transactions and do not affect your balance.

Re: Credit Card "Hold"

Anonymous — Mon, 16 May 2016 15:01:57 GMT

Hotels do not put a "hold" on the card as we are accustomed to it - that is, a "pending transaction" will not appear on your account and your available balance will not be affected.

The "hold" placed by a hotel is more like a permission - by giving them your card information, you are giving them permission to charge you for your first night, in case you do not show up to use your room. This is what justifies them holding that room for you when someone else may appear and want to take it, they are guaranteed to be paid for that night. If you've booked a series of nights, if you don't show up they will typically just charge the one night and cancel the rest of the reservation, although some chains/owners retain the right to bill your card for the entire stay, depending on the policy given when you made your reservation. This is how they get around the "unclaimed authorizations get canceled in 72 hours" part - they don't actually run the authorization until you fail to show up for the room. If you show up late that evening, they probably will have already run the card (many do this at 6pm or 8pm by policy), but you can still get that canceled if you want to pay cash or with a different card. In this case, you will see a "pending transaction" (authorization) on your card and those funds will be held by your bank until the authorization is released/expires.

And the part about being careful about them charging when you pay them with another card or cash is valid - on a recent road trip, we booked with cards but paid rooms with cash (we pooled cash to cover rooms and just paid each night out of the pool). We stayed at 8 different hotels in 9 nights, and the credit cards were untouched by 7 of them - one charged it anyway, even though we paid cash, and then proceeded to refund it only to charge it again two weeks later. It was a nightmare that involved calling the corporate offices of the MAJOR hotel chain and a series of emails and phone calls to get the stolen money back (since we'd paid, and since we were no longer even in that state much less at that hotel on the day they re-charged the card, I consider that stolen money).

Re: Credit Card "Hold"

SilverBerries — Mon, 16 May 2016 19:25:34 GMT

Thanks for the replies. The information was a big help!

Re: Credit Card "Hold"

Anonymous — Mon, 16 May 2016 23:01:45 GMT

Once a merchant puts a hold on your card, they may have a release rule internally, that might show on their website, you're doing a future hold...not applying towards current dates...technically since they're are "keeping" those dates open for you with a room...they can hold it until you cancel the reservation or your check-in dates...Each lender on the other hand has a internal release policy that could differ from a merchant. Like lenders can leave an auth on for 30 days and then drop it...that's common....check your lender rules on the card you used...then check the merchant rule...overall nope it doesn't affect your utiliz but it does affect your availalble credit on the card you used...nope it won't report that hold to CBs cause it's "ghosting" until moved from pending to posted, which in your case won't happen until you check in.