With gas prices soaring across the country, fueling up is frustrating enough these days; but when filling your tank interferes with your banking, it becomes another headache entirely. We've all been there: you pull up to the pump, insert your debit card, and pump your gas. Then you find that a $100 (or more) pending charge has been placed on your bank account. The hold effectively freezes those funds until your actual gas transaction clears.
We understand the problems that an unexpected charge like a gas hold can create within your cash flow. So here's Tanya Arbuthnot, Bank of St. Francisville's VP of Electronic Banking, to break down what gas holds are, how long they take to clear, and how to remove them right away.
What are pre-authorization charges?
A gas hold is a gas station payment processing method that places an authorization hold on your account for an amount ranging from $1 to $125, and leaves it there until your actual transaction clears. This hold appears in addition to the amount of your actual purchase, and ensures that the station receives payment for the fuel. The amount reserved varies depending upon the merchant.
"The gas station is reserving funds to ensure that they are paid for the gas in full, regardless of how much is pumped. The amount of the hold and the length it takes to clear varies upon the merchant. They don't know if you're going to pump $10 worth of fuel or if you're going to fill up an F-150. It’s similar to a hotel deposit,” Arbuthnot says.
How long can a gas hold remain on your account?
Pre-authorization holds can frustrate consumers who rely on their debit cards for day-to-day transactions, because the hold can tie up funds, and unsuspecting consumers may have other transactions declined until those funds are released. The charge can remain on your account for one to seven business days.
"Right now, unfortunately we're seeing them take an average of five to seven days to clear when not cleared manually," Arbuthnot says. “The merchant is why it can take so long, not the bank."
What happens when a pre-authorization charge is placed on your account for a higher amount than your current balance?
The debit card will usually be declined if the account balance is not high enough to cover the pending charge, Tanya says, even if the card is run as credit. Remember, a debit card run as a credit card doesn't mean your money is protected like a credit card. A debit card, even if you use it as a credit card, is still tied to your bank account. That means your money can be held or frozen so you can’t use it until the transaction clears, Arbuthnot says.
Is there a faster way to get a gas hold removed?
Contact BSF, and we can manually remove the pre-authorization charge on your account. "We have customers who will text us and let us know they just got gas, so we can remove the hold for them," Arbuthnot says.
Of course, you could always use a different payment method, like a credit card, or cash, when paying for gas. While holds are generally placed on both debit and credit cards, you may see a lesser hold (and sometimes no hold at all) when using a credit card. This is because the line of credit available on a credit card is typically large enough to cover the purchase amount without affecting future spending, whereas a debit card linked to a bank account is limited to the funds in the account at any given time.
If you have questions about suspicious activity on your account, contact BSF at 225-635-6397.