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I have a Mastercard debit card. When I pay an amount of money, I can see (with more or less delay) how much I've paid, when, in favor of who, etc.

Now the question is: why I can't see the pre-authorizations (or credit holds) that are pending on my debit card?

This is really disturbing. In August I've rent two bikes in Paris and now I have a 300€ pre-authorization pending on my debit card. I can't see it, I can't know when it will be lifted, but it's there.

Anybody has an explanation for this or it's just another banking trick to steal money (although temporarily) from customers?

  • Just for the record, I rent the two bikes on 27/08/2013 and it was only today that I had my money back. – Avio Sep 26 '13 at 10:26
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The simplest answer to why you can't see it in your online statement is a design/business decision that was made, most probably originally to make online statements differ as little as possible from old fashioned monthly printed statements; the old printed statements never showed holds either.

Some banks and card services actually do show these transactions online, but in my experience these are the rare exceptions - though with business/commercial accounts I saw this more, but it was still rare. This is also partly due to banks fearing lots of annoying phone calls from customers and problems with merchants, as people react to "hey, renting that car didn't cost $500!" and don't realize that the hold is often higher than the transaction amount and will be justified in a few days (or weeks...), etc - so please don't dispute the charges just yet.

Behind the scenes, I've had bankers explain it to me thusly (the practice has bitten me before and it bothered me a lot, so I've talked to quite a few bankers about this):

There are two kinds of holds: "soft holds" and "hard holds". In a soft hold, a merchant basically asks the bank, "Hey, is there at least $75 in this account?" The bank responds, and then has it's own individually set policy per account type as to how to treat that hold. Sometimes they reserve no money whatsoever - you are free to spend that money right out and rack up NSF fees to your heart's content. Yet some policies are to treat this identically to a hard hold and keep the money locked down until released.

The hard hold is treated very much like an actual expenditure transaction, in that the money is locked and shown as no longer available to you. This varies by bank - some banks use an "Account Balance" and an "Available Balance", and some have done away with these dual terms and leave it up to you to determine what your balance is and what's "available" (or you have to call them).

The key difference in the hard hold and a real expenditure is, technically, the money is still in your bank account; your bank has merely "reserved" it, earmarking it for a specific purchase (and gently promising the merchant they can have their money later), but the biggest difference is there is a time-limit. If a merchant does not process a completion to the transaction to claim the money, your bank will lift the hold after a period of time (I've seen 7-30 days as typical in the US, again varying by institution) returning your money to your balance that is available for purchasing and withdrawal.

In every case, any vaguely decent banking institution allows you to call them, speak to some bank employee, and they can look up your account and inform you about the different sort of holds that are on your account that are not pending/completed purchase transactions.

From a strictly cynical (perhaps rightly jaded) point of view, yes this is also used as a method to extort absurdly high fees especially from customers who keep a low balance in their account. I have had more than one bank charge NSF fees based on available balances that were due to holds made by gas pumps, for instance, even though my actual "money in my account" never went below $0 (the holds were for amounts larger than the actual transaction). And yes, the banks usually would waive those fees if you bothered to get someone on the phone or in person and made yourself a nuisance to the right person for long enough, but they made you work for it. But I digress....

The reality is that there are lots of back and forth and middle-men in transactions like this, and most banks try to hide as much of this from you the client as possible, partly because its a huge confusing hassle and its part of why you are paying a bank to handle this nonsense for you to start with.

And, as with all institutions, rules and policies become easily adjusted to maximize revenues, and if you don't keep sizable liquid minimum balances (100% of the time, all year long) they target you for fees.

To avoid this without having fat wads of extra cash in those accounts, is use an entirely disconnected credit card for reservations ONLY - especially when you are traveling and will be making rentals and booking hotels. Just tell them you wish to pay with a different card when you are done, and most merchants can do this without hassle. Since it's a credit card with monthly billing you can often end up with no balance, no waiting around for a month for payments to clear, and no bank fees!

It isn't 100%, but now I never - if I can possibly avoid it - use my debit/bank card to "reserve" or "rent" anything, ever.

  • Why are you saying its rare? I don't consider myself lucky, yet all of my bank accounts (in several different banks) will show pending transactions. – littleadv Sep 19 '13 at 17:22
  • @littleadv Well, I suppose I didn't consider myself unlucky, ad perhaps this changed in the last few years, but about 5 years ago I dealt with corporate, small business, and personal accounts totalling about 15 different accounts and 6-8 different banks (big national, small regional, and local credit union), and I had one - maybe two - that showed all holds or pending transactions that the bank was aware of (judged based on knowledge available to a teller). Now nearly all banks show some pending transactions, but when I dealt with it heavily preauthorization (soft) holds were not so great. – BrianH Sep 20 '13 at 0:22
  • 5 years is a long time – littleadv Sep 20 '13 at 0:48
  • @BrianDHall thank you very much for your thorough explanation. I'll unveil the mistery, I'm from Italy so yes, we're well more than 5 years behind the rest of the civilized world. You also centered the point, IMHO. I want this thing to be automatic, I just don't want to hang on a phone for half an hour begging someone to tell me where my money is. That's probably the most disturbing part: to depend on someone to have all the information that should be obviously and instantly at your disposal. – Avio Sep 20 '13 at 11:08
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No money is stolen. They don't show you the hold for whatever reason (not so good a bank?), but the money is still yours. You just cannot use it, but it is still on your account.

These holds usually go away after a week. In certain cases (like a security deposit) it may take up to 30 days. You can request from the merchant to cancel the hold if it is no longer necessary. They'll have to be proactive on that, and some merchants wouldn't want the hassle.

It is however a known issue. When I was working in the banking industry, we would routinely receive these hold cancellation requests from merchants (hotels and car rentals).

  • 1
    A word of caution, depending on the geography of the card issued and the geography of where the card is used and the Banks / Card network in question, Cancellation of HOLD is not automatic and may take 30 days to elapse. It would be best to use a credit card for HOLD and use the Debit card for actual payments if possible. – Dheer Sep 19 '13 at 9:52
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The hard hold is the bank holding your money for no reason but to make money of your. Like the hotel took deposit for my over night and they released the time checked out in there system but it never showed on my account . I had to call the bank why the numbers are not adding up to my current balance. It's illegal practice by banks to hold your money until your realize you didn't spent that much and that musing amount is not even showing on your account. When it happen they will release after 30 days or you can call the bank right away soon as you done your business so you can use the money right away not the bank

protected by Chris W. Rea Feb 22 '17 at 23:17

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