Why do hotel credit card holds last so long?
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
When you book a stay at a hotel, you may notice a large hold on your credit card account as a pending charge. While the charge is only temporary, it can lower your buying power for the duration of your trip.
Hotels aren’t the only kind of merchant to use pre-authorization holds to ensure funds for a potential charge, but they do typically hang around for the longest amount of time. Today, I’ll walk through what these holds are used for and why they can take so long to disappear from your account.
For more credit card tips and advice, sign up for TPG’s daily newsletter
What is a credit card hold?
Some merchants will request for funds to be pre-authorized on your credit or debit card pending a final transaction. Car rental companies, gas stations and hotels are three of the more common merchant types that will put a hold on your account.
The precise process for hotel credit card holds can be confusing to understand, since multiple parties are involved with their own role and rule in the transaction. When you check into a hotel, you’ve probably noticed that you are asked to provide a credit card for incidentals and any room service and/or minibar charges. This credit card is what the hotel will charge in the case of any damage to your hotel room.
Each hotel will have its own specific hold amount, generally between $50 and $200 on top of your room rate, with taxes and fees. While the hotel won’t officially charge you until after you check out, the issuer will put aside the hold amount in the interim to ensure that you are good for a potential charge.
That pending charge takes up part of your spending power on your credit card, which can be limiting when you are on a trip and need that additional spending power on your card to pay for dining and other activities.
Related reading: 5 things you need to know about debit and credit card holds
Why do hotels use holds?
Payment networks such as Visa or Mastercard are actually the ones that require a hold because of how hotel payment processes work. Any time a merchant processes a card before the final charge amount is known, your card network will likely require a hold to ensure that you have enough buying power in your account to pay off a reasonable charge.
This limits the risk taken on by the payment network that a charge will be made that you do not have the available funds for and for later chargebacks.
Why hotel cards can take so long to resolve
The amount of time a hotel hold may stay on your account can vary from hotel to hotel. Generally speaking, a hold will be released within 24 hours of checking out. But sometimes it can take up to a week to see the charge disappear.
Why does this happen? You might be tempted to blame the hotel, but it actually comes down to the card issuer.
Payment networks have set rules for how long an issuer can set aside a hold. For example, Visa cards can only have a hold last for up to 30 days while Amex cards only allow holds for seven days. But while payment networks set limits, the issuers each have their own standards in place for how long a pre-authorized charge may stay pending on your account.
So even after a hotel notifies a card issuer that a hold is no longer required pending an official charge, an issuer may still take a few days for the original pending charge to be removed.
Related reading: The best hotel credit cards of 2020
Credit card holds are unfortunately just a fact of using a debit or credit card with certain merchants like hotels. The only way to avoid a hold altogether is to use cash, but then you lose out on credit card points and other potential benefits that come with swiping your card.
However, one way to help ensure your hold is released as soon as possible is to use the same credit card for the hold as you do for the room charge. When you use two separate payment methods, it can take longer for the pending hold charge to be removed.
Featured image courtesy of the Grant Park Hotel
Welcome to The Points Guy!
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION*: $1,650
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
- Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.