Some Gas Stations Reportedly Put Holds of Up to $175 When Using Card
With gas prices surging across the country, major payment processing firms have raised the amount of "holds" that can be put on your card when you pay at the pump.
Why Is There A Hold On My Card?
Visa and Mastercard are allowing gas stations to place a $175 hold on your card when you swipe your credit or debit card to pay for gas, until the final amount is processed. Earlier in the year, a $125 hold limit was placed, but with gas prices still rising, the major payment processing firms have upped the limit to $175.
The previous limit of $125 was not longer sufficient to assure that there was enough money to cover the gas payment, especially in larger vehicles, a Visa spokesperson told the Wall Street Journal in a report published Monday.
Gas Station Put a Hold on My Card
The reason being is gas stations don't know how much gas you're going to pump when you swipe your card. So, some businesses place a hold on the card to ensure that they will receive adequate payment. Depending on the card used, the hold counts against a person's credit limit or account balance.
“When you set a hold that is a high number, it increases the likelihood that a consumer will overdraft because of that hold. However, if you set a number that’s too low, you also risk not getting paid for that transaction,” said Jeff Lenard, the vice president of strategic industry initiatives at the Association for Convenience & Fuel Retailing trade group.
Once the exact amount has been set, the hold is released. However, that can take hours, or sometimes longer to be released from an account. This, as you can imagine, has been causing problems with overdrafts and credit limits for some people.
“The pre-authorization is no big deal if you have enough credit on your credit card or cash in the bank. It becomes a problem when it temporarily limits your purchasing power or puts you in arrears,” AAA told Kelly Blue Book.
Ultimately, individual business owners place the hold amount, but the payment firms like Visa and Mastercard have the final say in how much the hold can be.
There are ways to avoid a hold on your card. Both ways involve you going into the store and putting a predetermined amount on a pump with either a card or cash.
Are Gas Prices Getting Higher?
Gas prices have fallen slightly in the last couple of weeks, but that doesn't mean we're in the clear. Prices are expected to go even higher once we hit peak summer travel season.
One expert warned that costs could hit “apocalyptic” levels if hurricane season causes disruptions to fuel production and shipments in the Gulf of Mexico.