What You Should Know About Credit Card Blocking
Credit card blocking is like having a slow leak in your spare tire: You are not aware of the problem until you need to do something about it.
Credit card blocking most often occurs when you rent a car or check into a hotel. It happens when you present your credit card and the clerk electronically asks the bank that issued the card to “block,” or reserve, part of your line of credit to cover the expected cost before you go out and use it for your other vacation purchases. If it's a hotel, what's blocked—usually on arrival—could be the cost of your room for the length of your stay, plus incidental expenses you may incur, like meals and phone calls. In the case of cars, it could be the cost of the rental, plus gasoline. The Federal Trade Commission says the amounts that can be blocked “vary widely among merchants.”
There is nothing sinister or illegal about it, as long as the amount blocked isn't out of line with what the customer is likely to pay at the end of the transaction. And most consumers are not aware that it happens at all, because the blocked amounts don't come close to their credit limits. But if you leave on vacation with your credit card near the limit, or if you are a business traveler who spends long periods on the road, you should be aware of credit blocking. This is because any additional transaction you attempt after you hit your credit limit would be rejected.
If the only block you want to be concerned with on your vacation is sun block, you might want to heed these tips from the FTC:
- Pay the bill using the same card you presented at the beginning of the transaction, so that the actual charge replaces the block in a day or two. If you use a different card to pay the bill, the block could remain on the original card for up to 15 days.
- When you check into the hotel or pick up the rental car, ask the clerk how much is being blocked, and how the amount was determined. This will allow you to factor the amount into your spending plans.
- If you use a different card or cash when it comes time to pay, ask the clerk to remove the block from the original card or call the issuer yourself.
Ruth Susswein, executive director of Bankcard Holders of America in Salem, Virginia, said some issuers will remove a block at the consumer's request, if they see the bill has been paid.
If you are trying to select from among potential credit cards, you might want to call the issuers to find out their policies on blocking, the FTC suggests.
Before you set off on your travels, you might want to call your credit card issuer and ask how long blocks are kept on credit lines. As important, Susswein said, ask how much of your credit line is available to you.