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Credit Card Blocking

Have you ever been told you were over your credit limit, even though you knew you weren't? If this happened shortly after you stayed in a hotel or rented a car, the problem could have been credit card "blocking."

What's Blocking?

When you use a credit or charge card to check into a hotel or rent a car, the clerk usually contacts the company that issued your card to give an estimated total. If the transaction is approved, your available credit is reduced by this amount. That's a "block."

Here's how it works: Suppose you use a credit card when you check into a $100-a-night hotel for five nights. At least $500 would be blocked. In addition, hotels and rental car companies sometimes include anticipated charges for "incidentals" like food, beverages, or gasoline. These amounts can vary widely among merchants.

If you pay your bill with the same card you used when you checked in, the final charge probably will replace the block in a day or two. However, if you pay your bill with a different card, or with 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 charge and didn't know you had paid another way.

Why Blocking Can Be a Problem

Blocking is used to make sure you don't exceed your credit line before checking out of a hotel or returning a rental car, leaving the merchant unpaid.

If you're nowhere near your credit limit, chances are blocking won't be a problem. But if you're reaching the limit, 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 no available credit.

How to Avoid Blocking

To avoid the aggravation that blocking can cause, follow these tips:

• Consider paying hotel, motel, or rental car bills with the same credit card you used at the beginning of the transaction.
• When you check into a hotel or rent a car, ask clerks how much will be blocked, and how the amount is determined.
• If you pay with a different credit card or with cash or a check, ask the clerk to remove the block.

In addition, when you choose a credit card, ask issuers how long they block credit lines for transactions involving hotels, motels, and rental cars. You may want to go with an issuer that uses short blocks

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