If you’re someone that relies on your credit or debit card for daily expenditures, you need to be aware of a practice called card “blocking” – a common practice utilized by debit and credit card issuers can create some problems for you if you’re unaware of it. Understanding blocks on your credit cards is critical, especially for individuals who travel frequently.
Blocking, which is common and perfectly legal, is the practice by banks of blocking off a certain amount of credit on your credit card or funds on your debit card to ensure that it will be available when the transaction closes. While the funds aren’t actually debited (removed) from your credit line or checking account, they’re not available for you to use either. In other words, if you have a $500 credit line and $300 is blocked off in your account, the available credit is $200 even though the $300 that’s been blocked hasn’t been pulled out of your account yet.
There are some things that you should know about blocking. For starters, funds may be blocked on your accounts more frequently than you realize. For example, when renting a car, car rental agencies often block out funds for the rental expense several days prior to closing the transaction. The same is true with how hotels use them. Upon checking into your room, hotels block out the cost of the room reservation in advance. The block usually includes the cost for the room, but might also include a “deposit” to cover the cost of damages to the room.
When you check out, the final expenses will be charged to your credit card, but the blocked amount may still remain in place for some time. Therefore, it’s best to use the same card you checked in with to check out. Otherwise, you’ll have a charge on one card and a blocked amount on another.
If you decide that you want to pay by cash, with a check, or with another card, you can ask the clerk to remove the block from the original card but don’t count on it – most desk clerks aren’t capable or even willing to doing that.
Another option is to look for a credit card or debit card that doesn’t allow blocking. This will reduce your card options significantly, but may be worth it if blocking is problematic for you. Nevertheless, make sure you understand ALL of the facts about debit and credit card blocks ahead of time.
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