What Is a Credit Card Authorization Hold?

A credit card authorization hold is a temporary amount placed on your account when a merchant wants to confirm that your card is valid and that enough credit is available for a transaction. The hold can temporarily reduce your available credit even though the final charge has not yet posted to your account.

How Does a Credit Card Authorization Hold Work?

When you use your credit card, a merchant may ask your card issuer to authorize a certain amount. Your issuer can temporarily reserve that amount from your available credit. Once the transaction is completed, the authorization hold is generally replaced by the final charge or released if the transaction is not completed.

Where Are Credit Card Authorization Holds Common?

Authorization holds are common when the final purchase amount is not known at the beginning of a transaction. Hotels, rental car companies, gas stations and some restaurants may place a temporary hold on your card before the final amount is determined.

Why Do Hotels Put Authorization Holds on Credit Cards?

Hotels may authorize an amount that covers the room charge plus an additional amount for possible incidental expenses. This can include things such as room service or other charges made during your stay. The final charge may be different from the original authorization amount.

Why Do Gas Stations Put Holds on Credit Cards?

When you pay at the pump, the gas station does not know your final purchase amount when your card is first authorized. It may therefore place a temporary hold for a preset amount. After you finish fueling, the hold is generally replaced by the actual amount of your purchase.

Why Do Rental Car Companies Put Holds on Credit Cards?

Rental car companies may place an authorization hold for more than the estimated rental cost to cover possible additional charges. The hold can reduce your available credit until the rental is completed and the final transaction is processed.

How Long Does a Credit Card Authorization Hold Last?

The length of an authorization hold can vary depending on the merchant, card issuer and type of transaction. Some holds disappear within a few days, while others may remain longer. After the merchant completes or cancels the transaction, the hold generally remains until the card issuer releases it.

Does an Authorization Hold Reduce Your Available Credit?

Yes. An authorization hold can temporarily reduce your available credit even though the transaction has not fully posted. This can make the amount of credit available to you lower than your total credit limit until the hold is released or replaced by the final charge.

Why Is My Available Credit Different From My Credit Limit?

Is an Authorization Hold the Same as a Pending Charge?

They are closely related, but the terms are not always used in exactly the same way. An authorization hold reserves part of your available credit, while a pending charge generally refers to a transaction that has been authorized but has not yet fully posted to your account.

Can an Authorization Hold Be More Than Your Actual Purchase

Yes. Some merchants authorize an amount that is higher than the expected final purchase. This gives the merchant room for charges that may not be known yet, such as hotel incidentals, rental car expenses or the final amount of a restaurant bill.

What Happens When an Authorization Hold Is Released?

When a hold is released, the temporarily reserved amount becomes available again unless it has been replaced by the final posted transaction. Your available credit should then adjust to reflect the completed purchase or the removal of the hold.

Can You Remove an Authorization Hold Early?

Usually, you cannot remove an authorization hold yourself. In some situations, the merchant may be able to cancel or release the authorization, but your card issuer may still need time to update your account. Contact the merchant first if you believe a hold should have been released.

What if an Authorization Hold Does Not Go Away?

If a hold remains longer than expected, contact the merchant to confirm whether the transaction was completed, canceled or released. If the merchant confirms the authorization is no longer needed but the hold still appears, contact your credit card issuer for help.

Can an Authorization Hold Cause Your Card to Be Declined?

It can. Because an authorization hold reduces your available credit, another purchase could be declined if the hold leaves you without enough available credit for the new transaction. This can be especially important when a hotel, rental car company or other merchant places a relatively large hold on your account.

Does an Authorization Hold Affect Your Credit Score?

An authorization hold itself is not typically reported to the credit bureaus as a separate item. However, it can temporarily reduce your available credit. Your reported balance and credit utilization are separate factors that may affect your credit score.

How Can You Prepare for an Authorization Hold?

Before using a credit card for a hotel, rental car or other transaction that may involve a hold, consider asking the merchant how much it expects to authorize. Making sure you have enough available credit for both the hold and your other planned purchases can help prevent unexpected declines.

Authorization Hold vs. Final Charge: What’s the Difference?

An authorization hold is temporary and reserves part of your available credit. A final charge is the completed transaction that posts to your account. The final charge may be the same as the original hold, but it can also be higher or lower depending on the actual purchase amount.

Bottom Line

A credit card authorization hold temporarily reserves part of your available credit while a merchant completes a transaction. Holds are common with hotels, rental cars, gas stations and other purchases where the final amount may not be known immediately. Understanding how they work can help you avoid being surprised by a temporarily lower available credit amount.