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I use a pre-paid Vanilla MasterCard credit card for online shopping. Every time I make a purchase, the companies I purchase from "hold" some similar amount which reflects negatively on my balance. Vanilla MasterCard's web page doesn't indicate this as any different from a purchase and so my balance is always completely wrong when I go check it online.

I've called Vanilla MasterCard several times to "release" these "holdings", and every time it works like a charm, resulting in a balance sheet that make sense. But I wonder why I have to convince a machine to let me speak to a human to tell that human to do this manually, every single time I make an online purchase.

This wouldn't be so horribly frustrating if their website made a distinction between charges actually made and charges that are being "held". I have to literally guess what my balance is until I get them to "release" the "holdings" and otherwise spend about 15 minutes on the phone arguing with a machine and waiting for people.

So I have a few questions.

  1. Is this something one has to deal with using normal credit cards?
  2. Is is possible to simply refuse these "holdings" using normal credit cards? - as far as I'm concerned, the companies I purchase from online have no business "holding" any of my money until they actually charge me.
  3. Do online balance sheets normally show a distinction between "held" amounts and amounts that have actually been charged?

Thanks in advance.

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The "hold" is just placeholder that prevents you from overspending until the transaction is settled. The merchant isn't "holding" your money, your bank or card provider is protecting itself from you overdrawing.

In general, it takes 1-3 days for a credit transaction to settle.

With a credit card, this usually isn't an issue, unless you have a very low credit line or other unusual things going on. With pre-paid and debit cards, it is an issue, since your spending power is contingent upon you having an available balance.

I'm a contrarian on this topic, but I don't see any compelling reason to use debit or stored value cards, other than preventing yourself from overspending. I've answered a few other questions in detail in this area, if you're interested.

  • K, that answers number (1). But do balance sheets normally indicate this? Thanks! – Teekin Dec 2 '10 at 22:09
  • @Helgi Credit card balance sheets do indicate this. The charges will be marked as "pending". – Michael Pryor Dec 3 '10 at 22:31
  • The answer is to 2 and 3 is to use a credit card, which in almost any scenario will have a credit line sufficient so that you don't need to worry about this stuff. – duffbeer703 Dec 4 '10 at 1:34
  • No, actually, first of all I don't want to use a credit card, I'm merely wondering if this is inherent to credit card use or just Vanilla MasterCard. Second, I still have to worry about it if it doesn't show on my balance sheet because I keep track of my money and I need to know how much I have without spending endless effort on it. But thanks for your answer. – Teekin Dec 5 '10 at 17:34

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