I'm adding this here because I wish I had known and it doesn't seem to be mentioned here or in the guidebook...but when using a debit card at a gas station in Iceland, they will add a $250 pending charge to your account PLUS a charge for the actual gas you purchased. It takes 3-5 business days to get rid of this charge, and that money will be temporarily held from your account. In my case, my entire account was essentially drained until they cleared it and I was back home. This is especially tricky because you must have your pin when using a credit card at the pump as well, which is why we were using a debit card. I wish I had known this before, especially when I then spent an hour on the phone trying to figure out what had happened to all my money and what to do to fix it (nothing, you have to wait for it to clear). Luckily we had a credit card, and you can go inside and use that to buy a pre-paid gas card, but hopefully my lesson helps someone else!
That is standard practice nearly everywhere. Hotels, car rentals, etc., will all put a substantial hold on a debit card. You should have been aware of if you had used your debit card in the US. And that is one of the reason it is frequently recommendation that you do not use a debit card from routine transactions. I only use a debit card for cash withdraws at an ATM.
I've seen this before at hotels, and smaller holds at toll roads and gas stations, but never such a large amount and truthfully it seems to be very rare these days. When I called my card company they also said they have never seen such a large amount held for gas stations before, and since using a credit card at the pump is not necessarily as easy as in the US since you need to know your PIN, using a debit card at the gas station there is a very easy thing to do without thinking of this consequence.
What's the problem with using a credit card at a gas station in Ireland? I've never been to Ireland but always paid for gas with a credit card in many other European countries. I too never use my debit card for purchases in Europe - only at the ATM.
Common practice on pre-paid gas. Here in the States where gasoline is relatively cheap, $100 holds are common. Do a web seacrch on "debit card gas hold" or similar and you will encounter pages such as:
What you need to know about credit card, debit card 'holds'
Holds and blocks can block off big chunks of your money
By Dana Dratch | Updated: May 27, 2016
Swipe a card at the gas pump or check in to a hotel — or any place
where your final total isn't known — and merchants often place a
temporary hold on the account. The purpose is to make sure you can pay
for that tank of gas, or for raiding the minibar on your way out.
Problem with debit cards is the duration of the hold which ties up your funds.
Hold times vary
Hold times could be minutes, days or even a week or more, depending on
a mix-and-match of elements, including the type of card you use
(credit or debit), the way you used it (PIN or signature), the bank or
credit union issuing the card, the merchant involved, your own history
and even the day of the week.
I use my debit card here in northern California all the time for gas and have never had a hold on it. I’m puzzled...
Susan: As a test of your thesis that Cal gas stations don't place holds, do an on-line check of your pending charges right after you purchase gas using a gas pump credit or debit card reader. That is, when you insert your card before pumping your gas. The hold on a debit card account affects your available funds until the finalized transaction is submitted. Once the hold clears, you don't see it on your statement.
When a merchant swipes a customer's credit card, the credit card
terminal connects to the merchant's acquirer, or credit card
processor, which verifies that the customer's account is valid and
that sufficient funds are available to cover the transaction's cost.
At this step, the funds are "held" and deducted from the customer's
credit limit (or available bank balance, in the case of a debit card),
but are not yet transferred to the merchant. At the time of the
merchant's choosing, the merchant instructs the credit card machine to
submit the finalized transactions to the acquirer in a "batch
transfer," which begins the settlement process, where the funds are
transferred from the customers' accounts to the merchant's accounts.
This process is not instantaneous: the transaction may not appear on
the customer's statement or online account activity for one to two
days, and it can take up to three days for funds to be deposited in
the merchant's account. The preauthorization will be terminated if it
is allowed to expire before the settlement occurs.
I have a $20,000 credit limit on my credit card. So it is no big deal if they put a temporary hold on my card for a hotel or car rental.
I only use an ATM card for cash withdrawals as ATM cards just don't provide the same legal benefits if you have a problem. I use a Capital One credit card mainly and still have another credit card and a second ATM card as backups.
Thanks, I would never, ever have thought this possible. I will soon be in Scandinavia and may well need to use a debit card at an unmanned station. So will put an extra $1500 on my travel debit card just for holds.
Incidentally only the west coast has those loony stations (Arco?) that give discounts for debit cards vs credit cards.
Debit card overdraft fees caused by a large hold can be even more expensive:
i.e. Citizens Bank's overdraft fee is $35 per overdraft with up to 7 overdraft charges in a day. And the overdraft charge puts you deeper in the hole.
The way this is supposed to work is you stick your card in the gas pump (or hand it to the person inside the station) and a hold is placed on your account. You pump your gas. The transaction completion message is generated telling your bank to release the hold on the amount over the purchase. All nice and neat and you don't even notice it even if you don't have the amount in your account they are trying to hold because your bank replies with the amount they will cover if it is less than the request.
But it doesn't always happen that way as this situation shows. The gas station is generating a hold, then generating a separate transaction for the purchase amount instead of sending the completion amount releasing the hold. The stations that still do this are only hurting themselves because the hold guarantees the money is there for them. Running the second transaction as a stand alone separate purchase may cause them to not get paid at all if there is not enough money to cover the hold plus the actual purchase as the second purchase can be declined. The bank doesn't know the two separate transactions go together. Also, this hold is supposed to be for not more than 24 hours and it should disappear with no additional action.
Whoever did that will get punished by the card network. They always do. Eventually.
And Wikipedia is not exactly right on how this works. When the money gets deposited to the merchant has nothing to do with the hold process.
Edgar, it’s not my thesis that California gas stations don’t place holds. I’m only saying it’s never happened to me in northern California. I can’t speak for all of California or for anyone else.
I check my bank statement almost daily and there’s never been a hold. Your link says it can be many days. It is true the gas station charge doesn’t show up for about 2-3 days but there’s no record of any amount of my money being “held”. So I’m still puzzled.
Tom_MN, I buy gas at Arco almost exclusively and there’s no discount for a debit card.
I don’t know of any gas station in Marin County or SF that gives a discount for a debit card.
I've run across Arcos in Orange County and Oregon that do, notice that the Arco in this view is about 20-40 cents cheaper than the other 4, it's the debit /cash price discount https://firstname.lastname@example.org,-117.9135408,16.75z
Susan, Since you don't see the holds, that means the gas stations you use are doing them correctly.
The hold is only supposed to be there long enough for the transaction to complete, not until the funds are actually charged to your account or paid to the merchant. Once a transaction completes with a successful completion code, the merchant is guaranteed payment for that amount so the hold has performed its purpose and should go away even if they don't settle their terminal with the credit card companies for weeks. As I stated in my other posting, the hold has nothing at all to do with the actual settlement of the funds or when the real transaction shows up in your account.
How do people see holds on their bank accounts? I can never see when money is being held, say for a deposited check to clear. I know there are holds, but can't see them.
Mark, thank you, I understand better now.
Long ago I’ve had “holds” for hotel or rental car, for instance, that did show up on my statement... but haven’t used my debit card for that in years. I have never had a hold on my card for gas though. That’s why I was puzzled.
Tom_MN, totally believe you. Every “area” can do things differently, even in the same state. Arcos in my area charge 35 cents to use a debit or cc. Gas is still cheaper at Arcos in my area even w that fee added so I pay it. I never carry cash.
Many banks don't show pending holds on debit cards because it can completely confuse the account holder. If your bank shows an Available Balance and some other balance (mine calls it Present Balance) and they don't agree, that difference is what is pending. My other bank list the amounts on hold and when they will clear on a separate page from the main account activity. Your bank might do something similar.
My main bank also shows pending ACH (auto debit payments and direct deposit) items as pending on the day they will post, but includes them in both balances shown. It does that only because of the certainty that they will post (and to give me the opportunity to transfer money in if the debits are more than anticipated).
At least one gas station chain here has signs on the pump that explain the gas hold for debit/gift cards and indicate you should pay the attendant inside instead of paying at the pump to avoid this.
Here is Wells Fargo's FAQ https://www.wellsfargo.com/help/faqs/activity-faqs/ answer to "What other factors affet my available balance?":
Debit card purchases
If you make a purchase with your debit card, the merchant may request
authorization for an initial amount and send us the actual transaction
amount later for payment. This is often the case in places where you
can add a tip to your bill (such as restaurants or salons), hotels and
car rental agencies, where there can be a significant difference
between the amount that's authorized initially (authorization hold
amount) and the actual transaction amount. The initially authorized
amount appears in your pending transactions, but the actual
transaction amount is deducted from your account.
For most debit card purchases, we receive the payment request,
including the actual transaction amount, within three (3) business
days of the transaction. If we don't receive a final payment request
from the merchant within three (3) business days, [or up to thirty
(30) business days for certain types of debit or ATM card transactions
including but not limited to car rental transactions, cash
transactions, and international transactions], we release the
authorization hold on the transaction. We then remove the transaction
from your list of pending transactions and add the funds back to your
If we receive the payment request at a later date, the actual
transaction amount will be deducted from your account at that time.
Keep track of your transactions and ensure you have sufficient funds
in your accounts to cover the final payment.
I've seen a $1.00 charge from a gas station in Las Vegas, using a credit card. It goes away within 24-36 hours. It surprised me the first time.
Noticed 1500 NKR ($185) hold placed at a Circle K filling station east of Ålesund, Norway. This was a credit card. Ultimately a half tank was $50. Did not need a PIN or signature, it just took the payment at the pump identical to procedure of buying fuel in US.