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What you need to know about credit card, debit card ‘holds’

They can be a inconvenience, but there are ways to avoid them


Gas stations and hotels use credit card “holds” and “blocks” that may limit access to your own credit and cash.

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Swipe a card at the gas pump or check in to a hotel – or any place where your final total isn’t known – and merchants often place a temporary hold on the account. The purpose is to make sure you can pay for that tank of gas, or for raiding the minibar on your way out.

“They’re used in situations where the total purchase is not known and cannot be easily returned,” says Gray Taylor, executive director of Conexxus, a nonprofit that creates technology education and standards for the convenience store and retail petroleum industry.

What is a credit card hold?

When a credit card hold occurs, the merchant electronically asks your card issuer, in advance, if you’re good for a certain preset amount, says Shelle Santana, professor of business administration at Harvard University. On the other end of that electronic conversation, your card issuer sets aside that amount.

This essentially puts a hold on a predetermined amount of your funds in your account, temporarily reducing your credit line by the amount of the hold. There are two types of credit card holds: administrative and authorization.

Administrative hold

There are a few types of administrative holds that the issuer can place on a card. One prevents you from using your card if you exceed your credit limit, and it remains there until you pay down your card. If you’ve been late with more than one payment, the issuer can put a hold on your card so you can’t use it; to get it reinstated, you’ll need to make several months of on-time payments.

Two ways to sidestep administrative holds is to set up alerts and automatic payments on your card – this way, the issuer will alert you if you’re getting close to exceeding your credit limit and automatic credit card payments will put an end to missed or late payments.

Authorization hold

Authorization holds are more like a security deposit for the merchant – they are put in place to verify electronic transactions. The card processor makes a portion of your credit card balance unavailable until the transaction is final.

How does a hold on a credit card work?

Holds on credit cards can work slightly differently among issuers. Here are some facts about how credit card issuers and merchants handle them:

Hold times vary

Hold times could be minutes, days or even a week or more, depending on a mix-and-match of elements, including the bank or credit union issuing the card, the merchant involved, your own history and even the day of the week.

Issuers set card-hold durations

Your card issuer – the bank or credit union that services your account and sends you monthly statements – not the merchant or card network (think: Visa or Mastercard), determines how long that hold money is gone from your account, says Jeff Lenard, spokesman for the National Association of Convenience Stores.

Visa rules allow issuers to keep a hold in place for up to a month, though few if any issuers do that, says Andy Gerlt, vice president of global corporate communications at Visa. More likely it’s one to five days, he says.

Andrew Urbaczewski, associate professor of business information and analytics at the University of Denver, agrees. While holds can be as long as five days, “it’s gotten a lot better now,” he says. “The average is about two days.” And “Some companies will only put the hold on if it’s a debit card. They won’t do it with a credit card.”

But the merchant never sees a dime of that hold money – only the amount you actually spend, Taylor says. “This is our frustration,” he says. Some banks will tell the consumer that “the merchant is holding your money. That’s not true. We never see that money.”

Making it more confusing: Issuers can have different hold rules for various merchants and types of sales. So that hold for gas at the pump might come off almost immediately, while the hold from your hotel stay remains a day or two after you check out.

Concerned that holds are lasting too long? That’s a conversation you want to have with the bank or credit union that issued the card, says Lenard. And “How long do your card holds last?” is a smart question the next time you’re shopping for a credit card, bank or credit union.

“The average is about two days … Some companies will only put the hold on if it’s a debit card. They won’t do it with a credit card.”

Merchants set hold amounts

Merchants do set the hold amounts, Lenard says. At gas stations, which commonly use holds, they want to set an amount high enough to cover a fill-up for a fairly large tank, he says.

But hold amounts don’t necessarily change with the price of gas. Merchants “tend to not adapt these holds too often,” he says. They “tend to set up a hold amount and keep it.”

At the pump, holds can run the gamut from “$50 to $125 depending on the store,” says Lenard.

Card networks, such as Visa and Mastercard, require merchants that process cards before the purchase total is known (as when you swipe before you pump) to either use holds or cover any losses resulting from those charges, says Lenard. If merchants use holds, card networks absorb losses and chargebacks, Taylor says. “If a merchant doesn’t do a debit hold, they will be eaten alive by chargebacks.”

While hotels and motels often use holds, their policies have made it easier for cardholders in the past several years, says Nessa Feddis, a senior vice president for the American Bankers Association.

It used to be that if you checked into a hotel for two weeks, the hotel would put a hold on your card for the entire amount of your stay, she says. Within the past few years, hotels have switched practices, and many now place a few smaller holds throughout your stay, rather than blocking one large amount at check-in, she says.

Avoiding card holds

There are a handful of ways to avoid card holds. Each has its own challenges:

  • Go old-school and pay cash at the pump. This is not always convenient.
  • Limit your purchase. Have the clerk authorize your pump for a limited amount before you swipe your card, “like $20 on pump seven,” says Urbaczewski. Since your final total is known, there’s no hold. And you can often do this over the intercom at the pump. But it means either yelling into a speaker or going inside.
  • Ask about hotel holds in advance, says Santana. How much will it be and how often will it be charged? See if there’s any leeway in the hold amount.
  • Find out what’s required if you want to pay cash. “It’s a little more difficult,” says Urbaczewski. “Some of them will require a larger cash deposit. Some of them are happy if you pre-pay.”
  • Ask for a temporary credit line increase. While this doesn’t avoid holds, it’s one tactic to cope. If you’re going to be traveling and suspect that holds might eat up your available credit line, you can ask a credit card issuer to bump up your credit line for the duration of your trip, says Gerlt. The issuer will likely review your credit. And if it does a formal “hard inquiry,” that could knock a few points off your credit score.

When it comes to consumers avoiding holds, “The options are limited,” says Santana. “The larger the hold, the larger the problem.”

Bottom line

Credit card holds can be an inconvenience. And although you can’t stop a merchant from putting a hold on your credit card or expedite the time it takes to clear, you now know that there are a few ways you can sidestep them.

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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