Credit Card Authorizations and Fees

[CreditCrusader]

Apologies if these matters have already been discussed, but they're important enough that they bear repeating.

1. I have noticed that gas pay-at-the-pump authorizations have begun to amp up.

The practice of gas stations pre-authorizing a certain amount (and then batching the actual amount, resulting in the pre-auth falling off) is not new. But the practice of pre-authorizing $225 and $275 (which happened to me at Meijer and Circle K on consecutive days) is. Folks using cards with low-ish limits would be advised to account for this and/or pre-pay a specific amount inside, as the days of the $1 pre-auth appear to be screeching to a halt.

2. At the same time, I have noticed that credit (and, in some cases, debit) card transactions are becoming subject to 2-5% credit card fees imposed by retailers. Heck, in a small nearby town of fewer than 3,000 people, I paid cash on two separate occasions during the same day because the CC fees were 3.8% and 5%.

Now, not all areas of this country are monolithic. As is the case with all things credit, YMMV.

But the persistent inflation that has gripped our economy has saddled many businesses with two choices: increase product/service prices or raise revenue in other ways...and it looks as though those other ways may involve nullifying the use of credit cards to earn rewards in excess of usage costs.

I'd love to get feedback from those in other parts of the country (Midwest here). Are you seeing these (or other) trends that may limit usage of CCCs?

[SUPERSQUID]

I just had this happen to me last thursday july 7th. i gassed up at a BP station in NJ and the receipt from the pump showed 59.93. the card i used was bread financial amex. when i came home i checked my account and saw BP charged my card 125.00 .

I called bread amex to flag the purchase but the csr said it was just a hold and once the charge went through it would be the 59.93.

It did get processed as 59.93

[calisig]

What I just started noticing Saturday was that several fuel stations have raised their credit prices by $0.15 per gallon instead of the usual $0.10 per gallon. So I wonder if a credit markup of $0.15 per gallon is going to become the new norm?

I haven't noticed the pre-authorization issue you raised, but I will start to look for it. Thanks for posting about this

[DSTforlife]

I started noticing this last month in Georgia.  I use BCP for gas, and notice at multiple places, they put a $175 pre-authorization on my card....although i refuse to pay more than $60.

It makes sense though because my DH has an extended fuel tank on his truck, and it cost him $135 to fill up.

[GatorGuy]

In Florida, haven't noticed CC surcharge fees yet.

Haven't seen the authorizations increasing either but unfortunately usually the charges are already high (>$100) since DW car takes premium. 

[xaximus]

I've noticed the change from the $1 auth to a larger amount for awhile now. If I remember correctly, it previously used to be $75 or $100, but it has bumped up especially due to gas prices going up. Sadly, until gas prices come down, I'm pretty sure those higher auth numbers are gonna stay.

As far as your other point - I've seen in NY/NJ, the credit card processing fees differences for quite some time now. Cash is usually like 5 to 10 cents cheaper.

[OmarGB9]

I've noticed the higher pre-authorization amounts for gas, though it varies by brand. Some are around $150 (Sam's Club for example), some are $200 (Shell). Haven't noticed CC surcharges, only slightly higher amounts for credit at some gas stations. 

[collics]

Yes if you have a lower limit card is best to prepay. 

[CreditMarathoner]

I was actually thinking about this today, and wondered how pay at the pump auths/charges actually work.

At the stations I go to, I always see the exact amount I pumped as the amount of the charge that I receive a text for, as well as the amount of the pending charge on my account.  I think they do some sort of "not a full authorization" pre-auth when you insert the card, then after you pump the gas and replace the nozzle, it then sends the actual transaction amount for the final authorization/pending charge, which then triggers the text.

I know years ago I would see an auth for a set amount like $1 or $50 or something, then the actual amount posts later.  But I think the APIs used by the pumps have been improved since then, so now they can pre-auth and then issue a final pending charge amount after pumping.

Maybe it still pre-auths a set amount like $100 or $200 but I never see it, since it gets updated after pumping.

For people with low limits, tight budget or using prepaid/debit cards it would be nice if the pumps allowed an option to enter an amount ahead of inserting the card, like "I only want $20 of gas, authorize only that amount and let me pump that amount".

[righthererightnow]

"I have noticed that gas pay-at-the-pump authorizations have begun to amp up."

YES.... just had a $150 pending charge appear for a $47 gas station charge. Had a long conversation with a relative about this last month so wasn't as SHOCKED as I could have been but jeeez. Scary! (I used a low-limit card and it could have been messy). I'm in Missouri, and have never seen this before on any of my cards (credit or debit, not before). First time!