Avoiding Credit Card Problems

Here are a few tips to help you avoid some credit card problems and some information to help you understand how retailers may get preauthorization on your credit cards.

When you go to certain retailers such as hotels, car rental agencies and even some bar or restaurant locations, these companies may get a pre-authorization on your credit card and reserve a certain amount on those cards. The credit card company will then put a hold on your credit card until they have been processed for the complete total. This could possibly limit the use of a card because you have reached your credit limit even though you have not used the amount.

Some Fuel Centers are notorious for this as they see you pulling up to get a tank of gasoline. Then you swipe your card. Even though you may have only pumped in $20.00 in fuel, they might have got a hold on your card for $75.00. Some of these retailers don’t process their credit card payments every night so if they don’t process for a couple of days, your credit card thinks that $75.00 has been used and not the $20.00 that you actually pumped into your car. Most retailers don’t even know that they are doing that because it is the company that the retailer is using for processing their credit payments. Just be aware that even though you will get credited for the $75.00 and only charged the $20 that you put in, it will just hold up your card usage.

When you are traveling or you are out on business, you want to remember that this does occur. Hotels and Car Rental companies generally get the pre-authorization and put a hold on what they figure might be your expected expenditure (plus some). Hotels also might get some additional if they have things like room service or a restaurant and bar on the property. They might put a hold on an amount double to what your true expenditure might be.

Because of this, you will want to try and find out what “pre-authorized” amount is being put on your card. This might help you from running into an embarrassing situation like the following.

Say you flew into a town on business. You rented a car and then checked yourself into a hotel as you are planning on being in town for a few days. You have invited a client out to dinner to discuss business. You don’t realize that your card is technically over your limit due to the hold that has been put on your credit card due to the car and hotel. It now comes time to pay for dinner and it gets declined. How embarrassing that could be and could cost you some business.

It is important that you keep that in mind when using your credit cards. Many people have several cards for different reasons. One card might be used for travel (airline, car rental, etc…) and another card might be used for hotel and food expenses. Finally you might have one card that you use strictly for business (such as taking a client to dinner). This often helps you keep from running to problems with certain cards being over their limit.

Sometimes those card amounts that are on hold get removed once the true balance has been processed, but again, that may not happen right away. Remember to keep tabs on any and all charges that are made to your credit cards. Reviewing your statement each month especially after traveling is extremely important as you might have been a victim of identity theft while you were traveling and may not know until you get the statement.

If you have any questions about the amounts being put on hold, ask the retailer. If they can’t or don’t answer the question, contact your credit card company. They can go over your expenditures and tell you what they show on your account. Make sure that you compare your receipt to the statement at the end of the month. Never reveal a bunch of credit cards when opening your wallet or purse as this becomes a strong temptation to a thief. Watch who you give your credit card information to and monitor the purchase or transaction. Altering the numbers is not as easy as it used to be, but adding a “tip” could clearly be altered if you don’t see the final charge receipt.

Contact the credit card company with any questions in regards to the balances or hold figures currently on your credit card.

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