Have you ever gone through the embarrassment of being told you were over your credit card limit or had your debit card declined, even though you were certain that you had available credit or money in your bank account? If this happened shortly after you stayed in a hotel or rented a car you may have experienced what is known as credit card "blocking."

What is "blocking" anyway?
When you use a credit or debit card to check into a hotel or reserve a rental car, the clerk usually electronically contacts the company that issued your card to give an estimated total. If the transaction is approved, your available credit or the balance in your bank account is reduced (or blocked from use) by this amount. That's a "block." Some companies also call this placing a "hold" on those amounts.

Here's how it works:
Suppose you use a credit or debit card when you check into a $100-a-night hotel for five nights. At least $500 would likely be blocked. In addition, hotels and rental car companies often add anticipated charges for "incidentals" like food, beverages or gasoline to the blocked amount. These incidental amounts can vary widely among merchants and sometimes can be quite significant. If you pay your bill with the same card you used when you checked in, the final charge on your card will most likely replace the block in a day or two. However, if you pay your bill with a different card, cash or a check, the company that issued the card you used at check-in might hold the block for up to 15 days after you've checked out. That's because they weren't notified of the final payment and they didn't know you paid another way.

Another situation is when you make your fuel purchase at the pump. If you buy ten dollars worth of gas with your card, you may not know that the station may routinely block all transactions for $50-75, then doesn't "un-block" as you drive away -- it waits until that evening, or worse, every few days to conduct a "batch" transaction.

So is it a problem?
Blocking is used to make sure you don't exceed your credit line or overdraw your bank account before checking out of a hotel or returning a rental car, leaving the merchant unpaid. Blocking is sometimes also used by restaurants for anticipated sizeable bills (like large groups at dinner or a party), by companies cleaning your home and other businesses to ensure credit or account money will be available to complete payment.

If you're nowhere near your credit limit or don't have a low balance in your bank account, blocking probably won't be a problem. But if you're close to your maximum, be careful. Not only can it be embarrassing to have your card declined, it also can be inconvenient, especially if you have an emergency purchase and insufficient credit or money in your bank account. On debit cards, depending on the balance in your bank account, blocking could lead to charges for insufficient funds while the block remains in place even though you truly have money in your account.

How can I avoid it?
To avoid the aggravation that blocking can cause by following these tips:

• When you check into a hotel or rent a car - or if a restaurant or other business asks for your card in advance of service - ask if the company is "blocking," how much will be blocked, how the amount is determined and how long the block remains in place.
• Consider paying hotel, motel, rental car, or other "blocked" bills with the same credit or debit card you used at the beginning of the transaction. Ask the clerk when the prior block will be removed.
• If you pay with a different card, by cash, or by check, remind the clerk you're using a different form of payment and ask them to remove the prior block promptly.

For more consumer information, or help finding the right resource for assistance, give us a call today at 1-800-HELP-FLA (435-7352) calling within Florida, 850-488-2221 outside of Florida, 1-800-FL-AYUDA (352-9832) en Español and a consumer specialist will be happy to assist you.

Source
Charles H. Bronson, Commissioner
Florida Department of Agriculture and Consumer Services